The extra yield on Treasury 10-year notes over two-year securities shrank to the narrowest in 16 months amid concern global growth and inflation are slowing.
Treasuries have returned 1.7 percent this month, set for the biggest gain since January, amid speculation the Federal Reserve will delay interest-rate increases. Thirty-year yields were near the least since May 2013 after China’s data showed inflation in the world’s second-largest economy moderated in September and before a U.S. report that economists said will show retail sales fell for the first time in eight months. U.S. inflation expectations were the lowest in more than a year.
“It is likely that the Treasury curve flattening will continue to progress in the next few weeks,” said Wontark Doh, head of overseas fixed-income investment in Seoul at Samsung Asset Management Co., which oversees $122 billion at the end of 2013. “Investors are expecting slower rate increases and there is concern about slower momentum in global growth.”
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