Tuesday, 10 April 2012 19:25
NEW YORK: US government debt prices rose modestly on Tuesday as renewed worries about Europe's debt crisis and the struggling US economic recovery bolstered expectations the Federal Reserve will undertake another massive round of monetary stimulus.
Gains were limited however, with some reluctance to push prices significantly higher going into this week's sales of $66 billion of US government debt.
Adding to Friday's weak US employment report were growth concerns in the euro zone, with Spain taking center stage in the region's debt crisis.
As European markets reopened after the Easter break, German Bund yields hit their lowest level since September and Italian and Spanish bond yields continued their march higher after sentiment towards the two countries soured following a weak Spanish bond sale last week.
"The bad news on employment brought about more doubt about the global recovery and how vulnerable we are to the double-dip (recession)," said William Larkin, fixed income portfolio ...