Treasury 10-year note yields traded at almost a three-month low as signs of a loss of momentum in global economic growth stoked bets the Federal Reserve will delay slowing its stimulus program until next year.
U.S. government debt was poised for a weekly gain as more Americans than forecast filed applications for jobless benefits last week and the trade deficit was little changed in August as imports and exports stalled. Treasury Inflation Protected Securities headed for the biggest two-month increase in more than a year before the U.S. sells $7 billion of the 30-year bonds in the first auction since lawmakers voted to raise the debt ceiling. The U.S. will sell $96 billion in notes next week.
“The expectation for the Fed to taper quantitative easing has been pushed into the first quarter of 2014,” Ian Lyngen, a government-bond strategist at CRT Capital Group LLC in Stamford, Connecticut, said of the Fed’s $85 billion of monthly asset purchases. “Two-point-five percent on the 10-year is a focal point for the market at this stage.”
The benchmark 10-year yield was little changed at 2.50 percent at 11:39 a.m. in New York, according to Bloomberg Bond Trader data. The yield dropped to 2.47 percent yesterday, the lowest level since July 22, and has fallen eight basis points this week. The 2.5 percent note due in August 2023 traded at 99 30/32.
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