NEW YORK: US Treasuries prices edged higher on Monday, with the 30-year's yield hovering near its record low as disappointing news on American consumer spending and factory activity and a volatile stock market stoked safe-haven demand for bonds.
Anxiety about deflation spreading across the euro zone and Greek leaders seeking looser terms on the country's 240 billion-euro bailout package from European policy-makers also underpinned demand for Treasuries, analysts said.
Bonds erased earlier losses on profit-taking following a stellar January when the market generated a 2.88 percent total return as the 30-year bond yield set a series of record lows on worries about weakening global growth. Last month's return on Treasuries was the biggest since a 3.54 percent jump in December 2008, according to an index compiled by Bank of America Merrill Lynch. "You had a heck of a run in January, so it's natural for a little pause.
The trend is still for yields to test lower," said Karl Haeling, vice president at Landesbank Baden-Wurttemberg in New York.
In light, choppy trading, benchmark 10-year Treasuries notes were last up 3/32 in price with a yield of 1.669 percent, down 1 basis point on the day.
On Friday, the 10-year yield fell to 1.637 percent, the lowest since May 2013.
The 30-year bond was 6/32 higher, yielding 2.250 percent, down 1 basis point on the day. On Friday, the 30-year yield hit a record low of 2.221 percent, according to Reuters data.
Two of the three major Wall Street stock indexes struggled to cling to initial gains.
The early losses in bond prices stemmed partly from some fund managers reallocating money into stocks from bonds at the start of a new month and on expectations of a relatively heavy supply of higher-yielding corporate bonds in February, analysts said. Apple Inc.
launched a $6.5 billion bond deal on Monday, according to IFR, a unit of Thomson Reuters.
The decline in bond prices was capped by a larger-than-forecast drop in a private gauge of domestic manufacturing in January and a weaker-than-expected December rise in construction spending that supported the view of a slowing US economic expansion.
The latest economic figures also raised bets the Federal Reserve would abandon possible plans to end its near-zero interest rate policy in 2015 and begin raising rates.
Policy-makers are keeping an eye on sluggish price growth at home and troubling financial developments in Europe.
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