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imageNEW YORK: US Treasury yields fell to more than three-month lows on Friday as European sovereign debt yields plunged on continuing concerns about a potential British exit from the European Union and global growth.

Ten-year yields in Germany, Japan and the United Kingdom all struck record lows on Friday. German Bund yields, the benchmark for borrowing costs across the euro zone, have fallen almost 10 basis points in little over a week to as low as 0.021 percent .

"There is some flight to safety because of concerns about 'Brexit'," said Lou Brien, a market strategist at DRW Trading in Chicago.

Benchmark 10-year notes were last up 7/32 in price to yield 1.656 percent, the lowest since Feb. 24. The notes have technical resistance at around 1.60 percent, and a fall below this level would likely trigger further yield drops, said Brien.

Plunging yields across the globe have increased the relative attractiveness of Treasuries, which pay far higher rates than comparable sovereign debt, and helped the Treasury sell $56 billion in coupon-bearing supply to strong demand this week.

The European Central Bank's commencement of its corporate bond purchase program this week has also increased demand for higher-yielding bonds.

The next major focus for investors is the Federal Reserve's meeting next week, where the US central bank is expected to leave interest rates unchanged.

Investors have pushed back expectations on when the Fed will next raise rates to December. Before last week's disappointing jobs report for May, a rate hike in June or July was viewed as possible.

The next major economic release in focus will be Tuesday's retail sales report for May.

Copyright Reuters, 2016

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