NEW YORK: Benchmark US Treasury yields fell to their lowest levels in over a month on Wednesday, while long-dated yields also hit fresh over one-month lows, on weaker-than-expected US economic data and continued low yields in Europe.
A disappointing batch of US economic data underpinned a bid for safe-haven Treasuries. Analysts said the data supported the notion that the Federal Reserve will hike interest rates later than expected, and that the impact was pronounced given low volumes ahead of the Thanksgiving holiday.
"Anytime (US data) veers off that very strong course, people start decreasing their probability of a Fed move," said Chris McReynolds, head of US Treasury Trading at Barclays in New York.
The Commerce Department said consumer spending increased 0.2 percent last month, while economists polled by Reuters had forecast a 0.3 percent gain, and also said non-defense capital goods orders excluding aircraft declined 1.3 percent last month. Economists polled by Reuters had expected a 1 percent gain.
The Labor Department said initial claims for state unemployment benefits rose to 313,000 for the latest week, above expectations for a 288,000 rise according to a Reuters poll, while home sales and consumer sentiment data also disappointed.
Benchmark 10-year yields fell to 2.2289 percent, their lowest since Oct 23, while 30-year yields fell to 2.9369 percent, their lowest since Oct. 21.
Euro zone bond yields hovered near record lows after the European Central Bank's vice president said it might decide in the first quarter of next year whether to begin buying sovereign bonds.
The statement pressured US yields lower, said Lou Brien, strategist at DRW Trading in Chicago.
Anticipation of the Treasury's sale of $29 billion in new 7-year notes supply capped gains, however, said McReynolds.
The auction will occur at 11:30 AM EST (1630 GMT). Benchmark 10-year US Treasury notes were last up 6/32 to yield 2.24 percent, from a yield of 2.26 percent late Tuesday.
US 30-year bond yields were last up 13/32 to yield 2.95 percent, from a yield of 2.97 percent late Tuesday.
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