U.S Treasuries Extend Winning Streak

Treasuries advanced for a fourth day as Chinese stocks fell back into a bear market and wiped out gains from a state rescue campaign, fueling demand for haven assets.

Ten-year note yields approached their lowest since October before a report on Friday that’s forecast to show U.S. retail sales contracted in December for the first time in three months, highlighting dangers to the economic recovery. Treasuries due in 10 years or longer have earned 2.5 percent this year, after a loss of 1.1 percent in 2015, as concerns about slowing growth in China boosted demand for havens and prompted speculation that falling commodity prices will depress inflation.

Treasuries advanced with their German counterparts as Brent crude slipped below $30 a barrel to the least since February 2004. Demand for U.S. bonds has been supported as investors reduced wagers on interest-rate increases this year, with futures showing the odds of an increase by the Federal Reserve’s April meeting falling to about 33 percent, from 56 percent at the end of 2015.

The benchmark Treasury 10-year note yield declined four basis points, or 0.04 percentage point, to 2.05 percent as of 9:31 a.m. London time, according to Bloomberg Bond Trader data. The 2.25 percent security due in November 2025 rose 11/32, or $3.44 per $1,000 face amount, to 101 3/4. The yield has dropped seven basis points this week and touched 2.04 percent on Jan. 13, the lowest since Oct. 28.

Forex heatmap

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell