US Treasury debt prices recovered from sharp losses on Wednesday to end nearly flat, as investors remain concerned about possibly faltering global growth. Treasury prices, which have been rising since late December, had been down sharply until the release of Federal Reserve minutes noting strengths in the US economy and signalling that plans for rate increases in 2015 were on track.
"For the market, (the Fed minutes) tilt slightly positive, but it's not a game changer," said Putri Pascualy, managing director and credit strategist at PAAMCO in Irvine, California. Yields on the benchmark 10-year Treasuries briefly topped 2 percent in New York trading after easing below the signpost level on Tuesday for the first time since October.
The 10-year's yield was last at 1.97 percent, reflecting a price fall of 3/32, according to Reuters data. A week ago its yield was 2.174 percent. Thirty-year Treasuries, whose yields on Tuesday approached record lows set in July 2012, last yielded 2.535 percent, compared with 2.753 percent a week ago at the end of 2014. On Wednesday, the 30-year's yield had been as high 2.572 percent.
Traders are again fixated on tumbling oil prices that suggest weakening economic demand and the anticipated launch of a massive bond-buying program to battle looming recession in Europe, according to Roger Bayston, director of Franklin Templeton's fixed income group in San Mateo, California. "The difference in yields between the US and European countries is something people are focused on," Bayston said. Shorter-term Treasuries, which are more affected by Fed policy shifts and have moved less in the rally than 10-year and 30-year issues, were mixed late on Wednesday, according to Reuters data. Coming off five sessions of losses, Wall Street stocks rallied on Wednesday. On Wall Street, which has slumped for five sessions as investors sought less risky assets, prices rose on strong US private sector jobs data and as deflation concerns in the euro zone were seen pushing the bloc's central bank into action.
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