Treasury 10-year note yields dropped to a more than two-week low amid speculation the U.S. employment market is floundering as politicians debate the so-called fiscal cliff, sustaining demand for safer assets.
Treasury bond yields rose from almost record lows after Federal Reserve Chairman Ben S. Bernanke kept alive speculation the central bank will provide more monetary stimulus to sustain the U.S. economic recovery.
Treasuries were little changed after the government’s auction of $35 billion in five-year notes attracted the lowest demand in almost a year as yields traded less than a quarter-percentage point above record lows.
Treasuries rose, trimming the biggest monthly drop in more than a year, after an auction generated higher-than-average demand. The dollar strengthened against most major counterparts, and the Standard & Poor’s 500 Index fell from an almost four-year high.
Treasuries rose, pushing two-year note yields to within a basis point of the record low, on concern Europe’s sovereign-debt crisis is getting worse and as the Federal Reserve cut its forecast for U.S. growth.
Treasuries rose as the highest pre- auction yields since July spurred stronger-than-average demand at a government sale of $35 billion in two-year securities and reports showed declines in consumer confidence and home prices.