Treasury 10-year notes rallied to finish little changed as weaker-than-forecast economic data dashed speculation the Federal Reserve might end stimulus measures anytime soon, driving investors into government debt.
Treasury 10-year notes gained for a second day after retail sales in the U.S. unexpectedly fell in March and as large speculators raised their net-long positions on the securities’ futures to the highest level this year.
Treasuries rose, pushing 10-year note yields down the most in three weeks, as an unprecedented proposed levy on bank deposits in Cyprus threatened to reignite the euro region’s debt crisis, boosting demand for a refuge.
Treasury 10-year notes fell for a second day as Federal Reserve Chairman Ben S. Bernanke stoked speculation the central bank’s monetary stimulus would bolster economic growth, diminishing the desire for safety.
Treasuries fell for a fourth day as the U.S. sold $35 billion of five-year notes at the highest yield since March amid concern the Federal Reserve may provide guidance tomorrow on when it will slow bond purchases.
Even after the worst start for Treasuries since 2009, derivatives traders are signaling there’s little chance of a bear market in bonds for the next three years as Federal Reserve Chairman Ben S. Bernanke fights unemployment.