NEW YORK: US Treasury yields fell on Thursday as investors remained cautious on the outlook for global growth, with yields also undergoing a sharp, if brief, drop after the government postponed its seven-year note auction.
Treasuries have largely followed oil moves as tumbling prices this year have stoked concerns about slowing global growth and the efficacy of central bank policies meant to try to spur new investment.
Bonds pared price gains, but still ended stronger on Thursday after oil prices retraced earlier losses, focusing on an upcoming meeting of major producers and news of drilling deferments and job cuts in the domestic energy industry.
"There's a growing sense that lower rates are no longer an anomaly, but are here to stay much longer than people thought," said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee.
US benchmark 10-year Treasury notes were last up 12/32 in price to yield 1.70 percent, down from 1.74 percent late Wednesday.
Concerns about economies in Europe and Asia are making investors wary of buying higher-risk assets, such as stocks, despite the recent drops in price. That is boosting demand for US Treasury debt, even with yields at historically low levels.
"We're trading on fears of growth around the world and what that effect is going forward," said Charles Comiskey, head of Treasuries trading at Bank of Nova Scotia in New York.
Yields briefly fell to session lows after the Treasury delayed its $28 billion sale of seven-year notes to Friday, citing "a technical issue."
The auction is the final sale of $88 billion in short- and intermediate-dated debt this week.
The US economy saw some positive news on Thursday. New orders for long-lasting, US-manufactured goods rose in January by the most in 10 months as demand picked up broadly, offering a ray of hope for the downtrodden US manufacturing sector.
A different release showed new applications for unemployment benefits increased last week, but they remained below levels associated with a tightening labor market.
The second gross domestic product estimate for the fourth quarter, due to be released on Friday, will be evaluated for further signs over the strength of the US economy.
Comments
Comments are closed for this article.