NEW YORK: US Treasuries yields fell to new record lows on Monday as concern that the euro zone's debt crisis is spiraling out of control led investors to seek out the relative safety of US debt.
US bond yields have fallen this month as economic growth loses traction and as investors increase bets that the Federal Reserve will launch new stimulus in a bid to reignite growth, and encourage new lending.
New fears over Europe's debt crisis on Monday sparked a rush to safe haven bonds after Murcia on Sunday became the second Spanish region to seek help from the central government, sending Spain's debt yields to record highs.
"The market is responding to the ongoing stresses in Europe," said Chris Ahrens, interest rate strategist at UBS in Stamford, Connecticut.
The eastern Valencia region of Spain said on Friday it needed help and media reported more regions are likely to do the same..
A planned visit by Greece's troika of creditors on Tuesday added to nervousness over the region, with many investors continuing to fear a Greek exit from the euro zone, for which markets are unprepared.
Greece has slid further off course from its fiscal and economic reform targets, and the man in charge of privatizing state enterprises resigned last week in despair at delays. The European Central Bank has also stopped accepting Athens' bonds as collateral for lending to Greek banks.
US Treasuries have benefited from a relative scarcity of high-grade debt, as well as expectations that the Fed will further support bonds through new debt purchases.
Benchmark 10-year note yields have fallen a full percentage point since March, when they traded as high as 2.40 percent. They traded as low as 1.3977 percent on Monday, 4 basis points below the previous low of 1.44 percent first reached on June 1.
Thirty-year bond yields fell to 2.49 percent, below its previous low of 2.51 percent also reached on June 1.
Comments
Comments are closed for this article.