Treasury bond exchange traded funds rallied Friday heading into a nervous weekend in financial markets. Yields on the 10-year note traded as low as 1.9%.
The iShares Barclays 7-10 Year Treasury Bond Fund (NYSEArca: IEF) was up 0.5% and has gained 9% for the trailing three months. Bond prices and yields move inversely.
Treasury ETFs were rising for the second straight week as Germany prepared its banks in case Greece fails to fulfill the terms of its aid package and falls short on one of its debt payments, report Cordell Eddings and Daniel Kruger for Bloomberg.
“Fear is driving everything right now,” Charles Comiskey, head of Treasury trading at Bank of Nova Scotia, stated. “People are nervous about Greece defaulting this weekend. That’s why you’re getting this kind of jump in the market.”
“There are still outstanding concerns about things deteriorating in Europe,” Richard Bryant, senior vice president for fixed income in New York at MF Global Inc., said in the report. “It looks like the market should be well-supported into the weekend.”