Treasury 10-year (USGG10YR) note yields traded at almost the lowest level in a year amid speculation on whether turmoil in Ukraine will escalate.
The benchmark debt’s yield pared an increase on concern Russia would use a humanitarian-aid mission to eastern Ukraine as a pretext for armed action in support of pro-Russian separatists there. NATO Secretary General Anders Fogh Rasmussen said there’s a “high probability” Russia could intervene militarily, Reuters reported. The U.S. is scheduled to sell $67 billion in notes and bonds this week.
“There’s a safe-haven bid as a result of the ongoing tensions between Russia and the west over Ukraine,” said Ian Lyngen, a government-bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “We’ve had ebbs and flows.” Lyngen recommends buying five- and seven-year notes on speculation they’ll outperform other maturities amid the debt sales.