Treasuries fell after a report showed existing home sales rose to their highest level in a year, indicating the U.S. economy is still improving amid slowing global growth.
The benchmark 10-year note yield increased as prospects for additional stimulus from the European Central Bank boosted equities and curbed demand for the safest assets. A government report tomorrow is forecast to show that U.S. inflation declined for a third consecutive month in September. Market volatility slowed and trading volume declined after reaching a record last week.
“This is a market that’s in suspended animation, even while risk markets are doing better today,” said George Goncalves, head of interest-rate strategy at Nomura Holdings Inc., one of 22 primary dealers that trade directly with the Federal Reserve. “We’re in a low inflation world with very highly accommodative central banks globally.”
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