US Treasury yields fell on Thursday in light post-holiday trading, after longer-dated debt posted its best yearly returns since 2014.
Yields fell even after China's central bank said on Wednesday it was cutting the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan ($114.91 billion) in funds to shore up the slowing economy.
Trading volumes were light, with many traders and investors away after Wednesday's New Year holiday.
The next major focus for the market will be manufacturing data on Friday, which will be watched for any indications of improvement after the United States and China last month agreed to the first phase of a trade deal.
It is "a number that people have eyes on," said Tom Simons, a money market economist at Jefferies in New York. "It's definitely a theme here in Q1."
Longer-dated debt gained last year on concerns about low inflation and weak growth as the Federal Reserve cut interest rates three times during the year. Demand for yield, with many bonds in Europe and Japan trading in negative territory, added to its outperformance.
Bonds gave up some of their gains in December, however, on optimism the United States and China would de-escalate their trade war, which has been blamed for slowing global growth.
Thirty-year bonds returned 16.34% last year, according to Bank of America Merrill Lynch. Benchmark 10-year notes returned 8.91% for the year.
The 10-year yields were last at 1.88%. They are holding below the three-month high of 1.97% reached on Nov. 7, but are up from 1.69% at the beginning of December and a three-year low of 1.43% reached on Sept. 3.
The yield curve between two-year and 10-year notes held just below 36 basis point level reached on Tuesday, which was the steepest since October 2018.
The cost to borrow overnight in the repurchase agreement market rose to 1.70% on Monday, after dropping as low as 1.40% on Friday as investors sought out Treasuries for year-end portfolio rebalancing.
The Fed's daily liquidity operations provided the market with adequate funding to get through the crucial year-end period, when there is often a funding squeeze.
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