By Deborah Levine, MarketWatch
SAN FRANCISCO (MarketWatch) — Treasury prices rose for a fourth session on Thursday, pushing benchmark yields back down and erasing the rise that followed the Federal Reserve’s meeting last week.
Weak economic data from China and Europe fueled the gains by U.S. bonds and added to evidence that global growth remains slow despite central-bank stimulus measures.
Yields on 10-year notes 10_YEAR -2.64% , which move inversely to prices, fell 4 basis points to 1.74%. A basis point is one one-hundredth of a percentage point.
The day before the Fed meeting, they yielded 1.77%.
Thirty-year yields 30_YEAR -1.62% declined 5 basis points to 2.92%.
Besides the Fed, the European Central Bank spurred investors’ move into riskier assets like commodities and stocks after saying it would buy the debt of countries who got an international bailout in order to keep their borrowing costs down. And while that removed some fears surrounding the ability of countries like Spain and Italy to service their debt, it does little to arrest the euro zone’s economy from falling into recession.
As for Thursday’s data and decline in risk appetite, Andrew Brenner, head of international fixed income at National Alliance Securities, said: “While the ECB has solved the short-term crisis in Europe, the world’s economies are now becoming the focal point, and it does not look pretty.” Read story on Chinese, euro zone data.
Investors are also concerned about U.S. fiscal policy. While expectations for a solution before the so-called fiscal cliff comes in December are low, there may be some hope that some congressmen are as wary of the economic consequences as the rest of the country.
Indeed, Fed Chairman Ben Bernanke was invited p to Capitol Hill to speak in a closed-door meeting to the Senate Finance Committee, where he reportedly briefed lawmakers on the repercussions of not dealing with expiring tax credits and letting major spending cuts occur, according to Reuters. Read Reuters story on Bernanke.
Coming up during the session, the Treasury Department will announce how much in notes it will auction next week. It will also sell 10-year inflation-indexed debt.
Deborah Levine is a MarketWatch reporter, based in San Francisco.
