By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) — Global government bond prices gained Tuesday, sending benchmark U.S. yields back toward a 13-month low and German bond yields to fresh record lows.
The 10-year Treasury note 10_YEAR -0.56% yield, which falls as prices rise, was down 1.5 basis points on the day at 2.476%. In May, the benchmark yield touched its lowest point in over a year at 2.438%.
The move comes ahead of a surge of economic news, including a second-quarter GDP report on Wednesday morning, a statement from the Federal Reserve’s policy committee that afternoon, and a nonfarm payrolls report on Friday.
European bond yields also fell on Tuesday, with the 10-year German bund BX:TMBMKDE-10Y -2.63% yield dropping 2.5 basis points to 1.124%, its lowest ever on a closing basis. The 10-year Spanish bond BX:TMBMKES-10Y -0.83% yield fell half a basis point to 2.491%. It briefly dipped below comparable U.S. Treasurys on a nominal basis.
Treasury prices rose despite stocks opening higher.
Here’s what’s moving the bond market on Tuesday:
The Case-Shiller 20-city composite index showed decceleration in the rate of home-price growth. Steven Ricchiuto, chief economist at Mizuho Securities, wrote: “This downshift in prices reflects the fact that the housing market has lost its upside momentum despite the low level of yields.”
Consumer confidence data showed the highest reading since 2007, helping Treasurys cut gains.
The deteriorating situation between Russia and Ukraine sent continued tremors across the bond market as Western nations agreed to tougher sanctions on Russia.
Shorter-term maturities in the U.S. Treasurys market posted narrower gains on Monday ahead of an auction of 5-year notes. Market participants have remained cautious on the so-called belly-of-the-curve , which could be sensitive to shifts in the monetary policy outlook, based on big data releases or the Fed statement. That has resulted in a narrowing of the differential between the 5-year note and 30-year bond.
The 5-year note 5_YEAR -0.35% yield was down slightly at 1.701% ahead of a $35 billion sale of notes. The 30-year bond 30_YEAR -0.28% yield fell 2 basis points to 3.242%. The spread between them was last at 1.54 percentage points, its smallest since the beginning of 2009 on a closing basis.
