Treasurys held on to gains even though the U.S. reported a jump in the number of homes being built last month.
Housing starts rose 2.3% from July as single-family construction reached the highest mark in more than two years. The recovery in housing will give a much-needed boost to U.S. growth, but it failed to inspire investors to come out of safe-haven Treasurys.
In early New York trading, Treasury prices hovered around session highs. Benchmark 10-year notes gained 10/32 in price to yield 1.777%, while 30-year bonds rose 27/32 to yield 2.968%. Bond yields fall when prices rise.
The market is poised for three-straight sessions of gains, clawing its way back from last Friday's sharp selloff in the wake of the Federal Reserve's new plans to buy unlimited amounts of mortgage-backed securities until the jobs market improves. The yield on 10-year U.S. Treasurys has fallen more than 0.10 percentage point since hitting a peak of 1.89% at the start of the week.
These gains come despite bold easing measures being taken around the world.
The Bank of Japan became the latest to join these efforts, announcing overnight that it will increase its asset purchases to ¥80 trillion ($1.01 trillion) from ¥70 trillion. The European Central Bank earlier this month said it will buy government bonds to help its struggling members.
But investors already are worrying that the firepower behind these easing efforts is limited.
Demand for the safety of U.S. government debt is also rising as worries mount about Spain's reluctance to request financial aid, a key trigger for the ECB to launch its bond-buying program.
For now, the Spanish debt market remained steady, though yields have come off the lows reached after the ECB's announcement. Its 10-year debt recently yielded 5.77%, from 5.5% last Monday.
