NEW YORK: US Treasuries rallied on Thursday and 30-year bond yields fell to their lowest in over a year as concerns over tensions in Ukraine sparked safety buying, and as European government yields continued to hit record lows.
Ukraine accused Russia on Thursday of bringing troops into the southeast of the country in support of pro-Moscow separatist rebels.
Expectations that the European Central Bank is likely to start a bond purchase program when it meets next week have also driven a strong rally in German government debt, which in turn has led Treasury yields lower.
"It's all about Europe," said Ira Jersey, an interest rate strategist at Credit Suisse in New York. "At the moment Treasuries seem to be at the whim of bunds."
Benchmark 10-year Treasuries were last up 7/32 in price to yield 2.33 percent, down from 2.36 percent late on Wednesday. Thirty-year bonds gained 17/32 in price to yield 3.07 percent, the lowest since May 2013 and down from 3.11 percent late on Wednesday.
German 10-year government bond yields hit record lows of 0.87 percent.
Large demand from investors rebalancing portfolios this week
is also adding a bid to US debt, traders said.
Treasuries yields rose slightly and very briefly after data showed that the US economy rebounded more strongly than initially thought in the second quarter.
Gross domestic product expanded at a 4.2 percent annual rate instead of the previously reported 4.0 percent pace, the Commerce Department said, reflecting upward revisions to business spending and exports.
The Treasury will sell $29 billion in seven-year notes on Thursday, the final sale in $93 billion of new coupon-bearing supply this week.
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