SINGAPORE: US 10-year Treasury notes rose on Wednesday after French bond yields surged the previous day, heightening worries that the euro zone's debt crisis was spreading to top-rated members in the region.
Ten-year Treasuries rose 9/32 in price to yield roughly 2.017 percent, down 3 basis points from late US trade on Tuesday.
The 10-year yield has dropped about 12 basis points from this week's high, but is still hovering within this month's range of roughly between 2.15 percent to 1.95 percent.
Stress on the euro zone periphery infiltrated the region's core on Tuesday, with yield spreads of French, Austrian and Belgian 10-year bonds over German Bunds hitting euro-era highs.
The widening in yield spreads "is definitely on the back of people's minds", said a trader for a US brokerage in Tokyo, adding that a drop in US equity futures and Asian shares were also supporting Treasuries.
In the stock market, US S&P futures fell 0.8 percent and MSCI's index of Asia-Pacific shares outside Japan shed 1.4 percent.
One factor that has helped limit gains in Treasuries in recent sessions, however, is data suggesting the US economy was gaining traction after stumbling in the first half of the year.
Data on Tuesday suggested the US economy maintained momentum into the fourth quarter, with retail sales increasing more than expected in October and a gauge of manufacturing in New York state rising in November for the first time since May.
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