U.S. 10-Year Treasury Note Falls on Inflation View: World's Biggest Mover

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March 8 (Bloomberg) -- U.S. 10-year Treasury notes fell, the biggest fluctuation of any government debt market in the world today, as some investors said yields were too low given the prospect for rising commodity prices to spark faster inflation.

The decline in the note was the most in more than a week, and comes as the Reuters-CRB index, which includes oil, corn, wheat and metals, rose to the highest since December 1980. Ten- year yields, which move inversely to note prices, yesterday touched 4.29 percent, the lowest since Feb. 28 even as the U.S. plans to auction $9 billion of the securities on March 10.

``With yields fundamentally still too low and the longer- term trend being to higher rates, strength in U.S. Treasuries will be used as an opportunity to sell,'' said Paul Calvetti, head of proprietary Treasury trading at Barclays Capital Inc. in New York. The firm is one of the 22 primary U.S. government securities dealers that trade with the Federal Reserve.

The benchmark 4 percent note due in February 2015 declined 9/16, or $5.63 per $1,000 face amount, to 96 15/32 at 12 p.m. in New York, according to bond broker Cantor Fitzgerald LP. The yield rose 7 basis points, or 0.07 percentage point, to 4.38 percent, the most since Feb. 28.

Bloomberg