LONDON: US Treasuries rallied in London on Monday, pushing benchmark 10-year yields to their lowest levels since early October as appetite for safer assets grew after weekend talks to form a new Greek government failed.
Greece's political stalemate made a repeat election more likely, potantially pushing the country towards a possible exit from the euro zone. Meanwhile, in Germany, Chancellor Angela Merkel's conservatives suffered a crushing defeat in a Sunday state election.
"We're not getting a lot of (Treasury) supply this week so the risk is we see this market continue to perform," a trader said. "The lack of good news and the continuing saga in Greece means we can definitely push down to 1.70-1.75 percent."
Ten-year Treasury yields were 5.5 basis points lower at 1.786 percent, approaching September's 1.67 percent all time low, with T-note futures 12/32 higher at 133-29/64.
"We expect yields to continue to grind lower," Deutsche Bank strategists said in a note. "This week's data calendar is light, and European events are likely to continue to drive US rates in the short run."
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