Treasuries Rise With European Bonds as Oil Drops a Second Day

  • Ten-year Treasury yield fell to the lowest in more than a week
  • Markets shut for holidays include China, Hong Kong and U.K.

U.S. Treasuries advanced with European government bonds as oil prices fell for a second day, boosting demand for the relative safety of fixed-income assets.

Benchmark Treasury 10-year note yields dropped to the lowest level in more than a week. Demand for haven assets spilled over from Asian trading hours, where the yen touched its strongest level in 18 months and Japan’s 20-year bond yield sank to a record. West Texas Intermediate futures fell as much as 1.1 percent in New York. 

Markets shut for holidays included those of China, Hong Kong and the U.K. Japanese markets were closed on Friday for a national holiday, and will be shut on Tuesday, Wednesday and Thursday this week.

“The correction started just before the close on Friday and persists early this week,” said Patrick Jacq, a senior fixed-income strategist at BNP Paribas SA in Paris. “Market activity is thin enough to prevent thinking about a major trend today. A trading range may prevail in such conditions” as holidays cap market activity.

Treasury 10-year note yields dropped two basis points, or 0.02 percentage point, to 1.81 percent as of 7:27 a.m. New York time, according to Bloomberg Bond Trader data. That’s the lowest since April 20. The 1.625 percent security due in February 2026 rose 7/32, or $2.19 per $1,000 face amount, to 98 11/32.

Germany’s 10-year bund yield slid two basis points to 0.25 percent after climbing 18 basis points in the previous three weeks.

Data Monday is forecast to show manufacturing activity in the U.S. held steady in April, according to the median forecast of economists surveyed by Bloomberg. Euro-area manufacturing growth was little changed last month as stronger readings in Germany, Italy and Spain were offset by contraction in France, Markit Economics said.

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