Treasuries Rally Drives U.S.-Germany Yield Spread to 4-Month Low

  • Benchmark 10-year U.S. yields fall third straight session
  • Spread over bunds declines below 2 percentage points

Treasuries gained as U.S. equities were on pace for the biggest decline of 2017, spurring a haven bid. The rally pushed the yield advantage on 10-year U.S. Treasuries over German debt to the narrowest in more than four months.

The benchmark 10-year U.S. yield fell about four basis points to 2.42 percent at 3:42 p.m. in New York, according to Bloomberg Bond Trader data. The yield is on track to decline for three straight trading sessions for the first time since February.

Meanwhile, German 10-year yields rose about two basis points to 0.46 percent, making the bonds among the worst performers among developed-market sovereign debt. The spread between 10-year Treasuries and bunds fell to about 1.97 percentage points, the lowest since November.

  • Bloomberg Dollar Spot index fell 0.4 percent, while the S&P 500 fell about 1.2 percent, which would be its biggest one-day decline since October
  • JPMorgan’s Treasury Client Survey showed the highest long positions since October
  • Fed’s Loretta Mester speaks Tuesday at the University of Richmond; later this week Janet Yellen, Charles Evans and William Dudley speak, among others

— With assistance by Edward Bolingbroke

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