Yields on 2-year notes touch the lowest on record
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose Monday, pushing 2-year yields to the lowest on record, as investors sought the relative safety of U.S. bonds following a State Department warning about potential terrorist attacks in Europe.
“The Treasury market was bid overnight, ostensibly owing to the heightened terrorism concerns in Europe,” said strategists at CRT Capital Group.
Yields on 10-year notes (UST10Y 2.49, -0.03, -0.10%) , which move inversely to prices, fell 3 basis points to 2.49%. A basis point is 0.01%.
The benchmark security’s yields fell to 2.4% on Aug. 25, the lowest since January 2009.
Yields on 2-year notes (UST2YR 0.41, -0.02, -3.79%) declined 2 basis point to 0.41%, after touching an all-time low of 0.39%.
Still to come, a U.S. report is expected to show the nation’s factory orders declined in August, while a separate report will show the pace of pending home sales slowed in August.
Investors also expect weak jobs data at the end of the week, which could keep some support in place for Treasurys.
The government’s monthly report on employment is expected to show an increase of 75,000 jobs in the private sector, according to economists surveyed by MarketWatch. Read about payrolls report.
Until the next meeting of Federal Reserve policy makers convenes early next month, bond traders expect to keep reading each economic report to gauge whether it makes the central bank more or less inclined to resume big purchases of bonds in an attempt to support the largest global economy.
”This week could make or break the prospects for the call to even lower rates if the jobs data do not surprise to the downside,” said bond strategists at Nomura Securities.
