Concerns over Ukraine, weak European data spark buying
By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) — Invested flocked to the safety of U.S. and German government bonds on Wednesday, as they raced to shed riskier assets amid a growing conflict in Ukraine and weak European data.
The 10-year U.S. Treasury note 10_YEAR -1.85% yield, which falls as prices rise, was down 4 basis points on the day at 2.442%, near its lowest closing level since June 2013. The benchmark yield is on track to close lower for its fourth straight day.
German bunds rallied, sending the 10-year BX:TMBMKDE-10Y -5.64% yield down 7 basis points to 1.102%, on track for a record low on a closing basis, according to Tradeweb. The U.K. 10-year gilt BX:TMBMKGB-10Y -2.75% yield fell 7.5 basis points to 2.509%.
European stocks fell and U.S. futures pointed lower.
The risk-off sentiment comes amid news that Russia is amassing troops near the border to Ukraine, raising concerns about an invasion. Italy’s second-quarter GDP report showed the nation slid back into recession, while German manufacturing sank in June.
Data showed the U.S. trade deficit shrank 7% in June due to a decrease in imports of petroleum. That could have positive effects on second-quarter GDP revisions
The Treasury Department said its quarterly refunding will include $67 billion in notes and bonds next week. There was little discussion during a meeting of market experts about an idea to issue a new type of ultra-long bond that would mature in more than 30 years.
The 30-year Treasury bond 30_YEAR -1.40% yield fell 4 basis points to 3.239% while the 5-year note 5_YEAR -2.04% yield fell 3.5 basis points to 1.628%.
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