Subprime worries quickly reshaping rate ideas

(Reuters) - Short-term interest rate futures, which measure market expectations of likely Fed policy, jumped on Tuesday after Standard & Poors said it might cut $12 billion in debt tied to subprime mortgages.




Rival Moody's Investor Services later said it had cut ratings of 399 mortgage-backed securities and was eyeing downgrades on another 32.


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TREASURIES-Bonds rise but yields still near 5-year high

(Reuters) - NEW YORK, June 13 - U.S. Treasury debt prices
rose on Wednesday on short covering, but benchmark yields
stayed near five-year highs as strong economic data raised the
prospect that the Federal Reserve may increase interest rates.




Short-sellers, who bet on falling prices, bought back bonds
and took profits after strong data on consumer spending failed
to push up yields to new multiyear highs, analysts said.


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Taiwan's Bonds to Drop, Pushing Yield to Three-Year High, Taiwan Life Says

(Bloomberg) -- Taiwan's government bonds may slump,
pushing yields to the highest since 2004, after traders placed
record bets against the debt, Taiwan Life Insurance Co. said.

Short sales reached a daily average of NT$37.8 billion
($1.1 billion) last week, the highest since records began in
March 2005, according to Huang Bing Jing, senior vice president
at Gretai Securities Market, which runs the nation's biggest
debt exchange. A short position is where an investor borrows an
asset in anticipation of making a profit by buying it back after
its price has fallen.


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JGBs fall on stock rebound, BOJ rate hike concern

(Reuters) - Short-term bonds remained under pressure as investors have
grown wary about an interest rate hike by the Bank of Japan in
the coming months, sending two-year yields to a 10-year high.




"Stock market gains and cheaper U.S. bonds were attracting
investors away from JGBs," said Tetsuya Miura, a bond strategist
at Shinko Securities.


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