Treasuries Rise on Concern Europe Crisis Will Slow Growth
Treasuries rose, trimming losses from yesterday, on concern Europe’s fiscal crisis will slow economic growth around the world.
U.S. 10-year yields were nine basis points from the record low as concern Greece will abandon the euro drives up demand for the relative safety of U.S. debt. Treasuries returned 1 percent this month as of yesterday, based on Bank of America Merrill Lynch indexes. The MSCI All-Country World Index of stocks lost 8.1 percent, including reinvested dividends.
“Slowing growth in the U.S. and China and the risk of a recession in Europe are helping Treasuries,” said Will Tseng, who invests in U.S. debt at Taipei-based Shin Kong Life, which has the equivalent of $52 billion in assets. “The fundamental question of whether Greece will leave the euro zone is still there.” Tseng said he has been buying 10-year notes this month, including purchases over the past two days.
Benchmark 10-year yields declined two basis points, or 0.02 percentage point, to 1.76 percent as of 12:13 p.m. in Tokyo, according to Bloomberg Bond Trader data. The 1.75 percent security due in May 2022 climbed 5/32, or $1.56 per $1,000 face amount, to 99 29/32. The yield slid to 1.6886 percent on May 17, approaching the record low of 1.6714 percent set in September.
Treasuries fell yesterday, pushing 10-year yields up four basis points, after Federal Reserve Bank of New York President William Dudley said he doesn’t see the need for additional stimulus.
Japan’s 10-year rate was little changed at 0.87 percent today. It was as low as 0.815 percent on May 18, a level not seen since 2003.
To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.
