Treasuries gained the most in more than eight months as yields higher relative to most Group of Seven nations increased demand from investors worldwide concerned global growth is stalling.
Benchmark 10-year notes yielded almost the most versus their German counterparts since 1999 after the dollar touched a two-year high versus the euro yesterday. The European Central Bank may detail its plan to buy asset-backed securities tomorrow amid slowdowns in Germany in France. Stocks tumbled, pushing the Russell 2000 Index into a correction, and bolstering the haven appeal of U.S. government securities.
“We have this quest for growth and central banks are unable to produce it,” said Richard Gilhooly, an interest-rate strategist in New York at TD Securities Inc., one of 22 primary dealers that trade with the Federal Reserve. “We have a global deflationary situation developing.”