NEW YORK: US long-dated Treasuries yields edged lower on Friday on persisting concerns over global economic growth, while short-dated yields were stable on short-covering after this week's dovish Federal Reserve meeting minutes.
Weak German economic data and the International Monetary Fund's third cut to its global growth forecasts this year have ignited fears about the health of overseas economies this week, and fueled some safe-haven bids for US 30-year Treasury bonds Friday.
"The price action is a continuation largely of the strength that we've been having," said David Ader, head of government bond strategy at CRT Capital in Stamford, Connecticut, in reference to a climb in 30-year bond prices, which in turn, have lowered yields from 3.38 percent less than a month ago to 3.05 percent on Friday.
He attributed the latest dip in yields to the lingering worries about global economic growth. Alarmed by faltering euro zone growth, top finance officials from around the globe on Friday were expected to press their European peers for action to avert a recession and ward off deflation. Prices were stable for Treasuries with maturities ranging from one to three years, supported by traders buying back those notes they had bet against, or shorted, in the run-up to Wednesday's Fed minutes.
The traders' expectation that the minutes would show a more hawkish tilt on raising interest rates failed to materialize. Their repurchase of the bonds is a process known as short covering.
"What we're seeing is short-sellers losing conviction," said Boris Rjavinski, an interest rate strategist at UBS in New York, The Labor Department said Friday US import prices fell 0.5 percent in September as the cost of petroleum products declined and a strong dollar made it cheaper for Americans to buy goods from the European Union.
Export prices fell 0.2 percent during the month. Import prices fell less than the 0.7 percent forecast of economists, however, according to a Reuters poll, and analysts said the data had little impact on Treasuries yields. Ader of CRT Capital said the data was predictable given the dollar's strength.
Benchmark 10-year US Treasury notes were last up 3/32 in price to yield 2.31 percent, from a yield of 2.327 percent late Thursday, which marked its lowest closing yield since mid-June 2013. US 30-year Treasury bonds were last up 9/32 to yield 3.05 percent, from a yield of 3.063 percent late Thursday.
The latest yield was not far from Thursday's session low yield of 3.029 percent, which marked the lowest level since May 2013. US three-year notes were last roughly flat in price to yield 0.91 percent, from a yield of 0.92 percent late Thursday.
On Wall Street, the benchmark S&P 500 stock index was last down 0.44 percent.
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