Treasuries snapped a decline before a government report that economists said will show purchases of new homes fell in America for a third month in July.
U.S. securities have returned 3.3 percent in August, their best performance since December 2008, based on Bank of America Merrill Lynch data. Investors sought the relative safety of the nation’s debt as concern that the world economy is faltering sent the MSCI All Country World Index of stocks down 13 percent in the same period. The U.S. is scheduled to sell $35 billion of two-year notes today, the same amount of five-year debt tomorrow and $29 billion of seven-year securities on Aug. 25.
“Risk aversion pushed yields lower,” said Kei Katayama, leader of the foreign fixed-income group in Tokyo at Daiwa SB Investments Ltd., Japan’s second-biggest bond fund. “The current yield level contains so much of a premium” that investors are willing to pay in exchange for safety, he said.
Ten-year yields were little changed at 2.10 percent as of 9:26 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2.125 percent note maturing in August 2021 changed hands at 100 1/4. The record low rate was 1.97 percent set Aug. 18.
Japan’s 10-year securities yielded 0.985 percent. The nation’s government bonds have returned 0.53 percent this month, the Bank of America indexes show.
New home sales fell 0.6 percent to a 310,000 annual pace, the slowest in four months, according to the median of economists’ estimates in a Bloomberg News survey before the report today.
Treasuries dropped yesterday on speculation Federal Reserve Chairman Ben S. Bernanke will signal additional measures to stimulate the economy.
Bernanke is scheduled to speak Aug. 26 in Jackson Hole, Wyoming, at an annual conference sponsored by the Fed Bank of Kansas City.
“The jury is still out on if we are going to get more from Bernanke or not, so the market is in a wait-and-see mode,” said Sean Murphy, a trader at Societe Generale SA in New York, one of the 20 primary dealers that trade with the central bank.