By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose Friday, pushing benchmark 10-year yields back to 2%, as data showing China’s economy slowed more than expected as well as rising Spanish debt yields left investors seeking safety.
Yields on 10-year notes 10_YEAR -2.24% , which move inversely to prices, fell 4 basis points to 2.02%. They touched 2% after U.S. data, near their lowest level in a month. A basis point is one one-hundredth of a percentage point.
Thirty-year-bond yields 30_YEAR -1.77% decreased 4 basis points to 3.18%.
Yields on 5-year notes 5_YEAR -2.70% fell 2 basis points to 0.87%.
Global equities came under pressure after China said first-quarter economic growth cooled to 8.1% in the first quarter, the slowest pace in almost three years. Read about China’s GDP.
Another catalyst, the Bank of Spain said the country’s banks nearly doubled their borrowing in March from the European Central Bank, pushing Spain’s 10-year yields back up to 5.9%, the highest since November. See story on Spanish stocks, yields.
Further fueling anxiety before the weekend, analysts noted that Moody’s Investors Service said it will announce rating changes on banks of several European countries starting next week.
“Which is more frightening today: the fact that it’s Friday the 13th or that China’s GDP disappointed and Spanish banks are getting slammed on the back of a report that Moody’s is on the precipice of a widespread downgrade of European banks?” asked David Ader and Ian Lyngen, bond strategists at CRT Capital Group.
“It’s not as if the latter is really a surprise as Moody’s does have a bunch under review but rather that the fact of any such action would raise borrowing costs that are already high enough to take a toll,” they wrote in a note. “In any event, it’s risk-off day.”
Treasury prices also stayed higher after a report showed the U.S. consumer price index rose 0.3% in March, close to analysts’ expectations. Still to come is a report on consumer sentiment for April. See story on CPI.
