NEW YORK: US Treasuries prices rose on Tuesday as investors concerned about slowing global growth continued to shun stocks, adding interest in safe-haven U.S. government debt.
Yields on U.S. Treasuries fell on investor caution about the likelihood of a global economic slowdown. The yield on the 5-year note fell to 1.1 percent during morning trading, its lowest since July 2013.
"There's a broad array of factors driving investors into Treasuries from fear about European banks, worries about financial market contagion and the possibility that you have financial weakness leading to perhaps a full-blown recession," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.
Overnight, Treasury prices rose sharply, with the yield on the 10-year note falling to 1.690 percent, its lowest in a year, while the yield on the 30-year bond fell to 2.514 percent, its lowest since April.
Price gains were briefly trimmed on Tuesday by an equity rebound driven by investors hoping a technology stock rally would outweigh losses in energy and financial shares.
"Stocks found a bottom so Treasuries are adjusting and trading in line with that, but investors are still skittish," said Stanley Sun, interest rate strategist at Nomura Securities International in New York.
For much of the year, Treasury prices have been benefiting from investors' worries of a sustained slowdown in global growth and falling oil prices.
Traders expect to the market to remain volatile throughout the day as investors weigh the risks of jumping back into stocks amid growing worries of a global slowdown.
Benchmark 10-year notes were last up 2/32 in price to yield 1.739 percent, from 1.735 percent late on Monday.
The 30-year bond was last up 2/32 in price to yield 2.567 percent, from 2.56 percent on Monday.
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.
Chinese markets are closed through the week for the Lunar New Year.
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