Treasury yields slip to new lows
Yields on 10-year U. S. Treasury notes suffered a notable fall to close at their lowest in as many as 11 months on Wednesday, partly due to weakness in German bond market and partly because of more buying from institutional investors.
Ten-year German Bund yields tumbled 1.337 per cent, after official data showed an unexpected rise in the country's unemployment rate. A deceleration in the supply of euro also led to decline in bond yields.
The unexpected figures put weight to expectations that the European Central Bank (ECB) will announce further stimulus to boost the European economy at its upcoming meeting, which is scheduled to take place on 5th of June.
The U. S. Treasuries also witnessed yields on its 10-year notes tumbling to their lowest since July last year. Yields on thirty-year bonds also slipped to their lowest in as many as 12 months.
Jeffrey Young, a strategist at New York-based Nomura Securities, said, "The month-end extensions are part of the Treasury rally and the word is it's larger than usual."
Dan Heckman, a fixed-income strategist at U. S. Bank Wealth Management, pointed out that foreign interest in the U. S. bond market was due foreign investors' concerns about ongoing global weakness.
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