BLBG:Treasuries Rise First Time in 3 Days as German Confidence Stalls
Treasury 10-year notes gained for the first time in three days as a report showing German investor confidence rose less than forecast stoked concern that global growth is faltering and spurred demand for the safest assets.
Benchmark 10-year yields fell from the highest level in seven weeks after Federal Reserve Bank of Philadelphia President Charles Plosser said slowing U.S. inflation doesn’t warrant a Fed policy response. Treasuries have dropped 1 percent this month as of yesterday, according to Bank of America Merrill Lynch indexes. The Fed is buying $85 billion of Treasury and mortgage debt each month to spur the U.S. economy.
“Our view remains that second-quarter growth will be quite soft and in that context it is hard to believe we are going to see a big Treasury selloff,” said Vincent Chaigneau, head of fixed-income strategy at Societe Generale SA in Paris. “We may see a broad Treasury selloff later in the year as the U.S. economy accelerates, but for now it will be limited.”
The U.S. 10-year yield fell two basis points, or 0.02 percentage point, to 1.91 percent at 10:34 a.m. in London, according to Bloomberg Bond Trader prices. The 1.75 percent note due in May 2023 gained 5/32, or $1.56 per $1,000 face amount, to 98 19/32. The yield climbed to 1.94 percent yesterday, the highest level since March 26.
To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
