NEW YORK: US Treasury prices rose on Monday, with the yield on the 10-year note reaching a one-year low, as falling stocks and renewed concerns about slowing global growth increased investor appetite for safe-haven government debt.
Treasury yields slid as U.S. stocks fell sharply on dropping oil prices and news that Chesapeake Energy Corp is hiring restructuring lawyers. The Treasuries rally was also fueled by falling European stocks.
"Weakness in global equities is adding pressure on Treasuries," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut.
Investors concerned about slowing growth noted data showing China's foreign reserves fell for a third consecutive month in January as the central bank dumped dollars to defend the yuan and prevent an increase in capital outflows.
"People are taking note of Chinese reserves dropping to their lowest since May 2012 and there are concerns that tightening financial conditions are putting pressure on yields," said Lyngen.
The yield on the 10-year note fell to a low of 1.765 percent, its lowest since February 2015, while the yield on the 30-year bond slipped to 2.592 percent, the lowest since April, The two-year note's yield fell to 0.67 percent, its lowest since October.
The Bank of Japan's surprise introduction of negative interest rates to stimulate the country's economy at the end of January helped spark a rally that sent 10-year Treasury yields to one-year lows.
U.S. bonds are expected to continue to draw demand on concerns about China and the global economic slowdown, and because Treasuries pay higher yields than comparable sovereign bonds in Europe and Japan.
Benchmark 10-year notes were last up 23/32 in price to yield 1.767 percent, down from 1.848 percent on Friday.
The 30-year bond was last up 1-25/32 in price to yield 2.598 percent, down from 2.681 percent late on Friday.
Data from the U.S. Labor Department on Friday showed that wages rebounded strongly in January, adding to bets that the Federal Reserve may increase interest rates this year. That also fueled interest in safe-haven government debt.
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