Treasuries rose for a second day as the European Central Bank’s decision to hold off on additional stimulus raised the attractiveness of higher-yielding U.S. government debt with the prospects for faster growth in Europe fading.
U.S. 10-year yields were higher than comparable debt in 18 other developed nations, according to data compiled by Bloomberg. The difference between yields on U.S. five-year notes and 30-year debt narrowed to 1.36 percentage points, the least since January 2009. Demand for Treasuries pushed yields lower before a report tomorrow forecast to show the U.S. labor market strengthened last month.
“Some people had hoped for more to be said and they didn’t get that” from ECB President Mario Draghi, said Justin Lederer, an interest-rate strategist at Cantor Fitzgerald LP in New York, one of 22 primary dealers that trade with the Federal Reserve. “They were looking for more details in the purchase program. U.S. yields are on a relatively cheap basis compared to global rate markets.”