Treasuries Rise for First Time in Four Days as Debt Rout PausesCecile Gutscher and Daniel Kruger
Treasuries rose for the first time in four days as the rout in bond markets worldwide paused as investors re-evaluated whether the move was excessive.
Bond traders had been caught off guard by signs the worldwide economy is likely to avoid mass deflation and by improvement in the euro zone’s economy, leaving little incentive to own debt securities with yields that in some cases are below zero. The selloff has erased all of this year’s gains as historic market moves from Germany to the U.S. and Japan whipsawed traders.
“For the bulk of the week the Treasury market has been following the lead of bunds and French sovereign debt,” said Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “We sold off a significant amount, we’ve stabilized and now we’re consolidating here.”
The 10-year Treasury note yielded 2.32 percent after climbing as high as 2.42 percent, the highest since October and up from as low as 1.64 percent in January.
Germany’s 10-year bond yield reached almost 1 percent before trading at 0.84 percent. They tumbled to a record-low 0.049 percent on April 17.
After five years of unprecedented central-bank stimulus, the reversal is a blow. Last year, global investors earned 7.8 percent on bonds, compared with 4.8 percent on stocks.