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Called ‘treasuries’, America’s government bonds are issued by the US Treasury and are considered the most secure government (sovereign) debt it is possible to hold. Many governments and pension funds hold large quantities of these bonds.

Ten year treasury prices are a good measure of how the market views the health of the US economy. Their performance is affected by a wide range of economic factors, amongst them the interest rates set by the US Federal Reserve, levels of unemployment, the level of overall US government borrowing, and the strength of the US dollar. Any benchmark of US economic performance, including speeches made by key policy makers like the Chairman of the Federal Reserve and the US Secretary of the Treasury, will affect the price of the 10 year bond.

Despite the high levels of borrowing by the US government, and the lack of real growth in the US economy over the past few years, US government bonds are still rated AAA by international ratings agencies. The US economy is still the largest in the world by a significant margin, and there is still a high degree of confidence on the part of international investors that the US will not default on its foreign debt obligations. China, Japan and the UK remain the largest holders of US government bonds.

Traders can profit from trading Treasury prices online using spread betting, CFD and futures accounts. Most of these will be priced off the futures contracts quoted on the Chicago Mercantile Exchange.

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Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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