* Worries over falling stocks, oil revive bids for bonds
* Robust demand for 10-year supply, InBev bond deal
* Chinese data stronger than expected, eases some concerns
(Recasts throughout, adds quote)
By Tariro Mzezewa and Richard Leong
NEW YORK, Jan 13 (Reuters) – The U.S. Treasury debt market
rallied on Wednesday with benchmark yields hitting their lowest
levels in over two months as tumbling stock and oil prices
stoked investor anxiety, rekindling safe-haven bids for bonds.
The scramble for bonds fed intense demand at a $21 billion
auction of U.S. 10-year Treasuries notes and $46 billion worth
of debt from brewer AB InBev, which was the second largest bond
corporate bond deal ever.
“Volatility is here is to stay until there are signs of
stability in the stock and commodities markets. This creates
demand for high-quality bonds like Treasuries and deals like AB
InBev,” said Matt Brill, senior portfolio manager of fixed
income at Invesco (NYSE: IVZ – news) in Atlanta (BSE: ATLANTA.BO – news) .
Treasuries’ rebound erased their initial losses tied to
better-than-expected Chinese trade data, which had soothed some
worries about global economic growth and stoked buying of Wall
Street shares and oil futures.
However, data showing a rise in U.S. oil supply alarmed
traders during U.S. trading. U.S. crude futures briefly
traded below $30 a barrel for the first time since December
2003. The bearish sentiment spread into Wall Street with major
indexes shedding more than 2 percent.
Two Federal Reserve officials voiced some of the worries
among investors and traders about China and tremendous market
swings since the start of 2016.
The rout in China’s stock market, weak oil prices and other
factors are “furthering the concern that global growth has
slowed significantly,” Boston Fed President Eric Rosengren said.
Chicago Fed chief Charles Evans said he is nervous about the
potential effects of China’s slowdown on the U.S. economy and
about the possibility that inflation expectations may be
Still, the Fed’s latest Beige Book on regional economic
conditions showed the economy continued to expand even as it was
restrained by a strong dollar and weak energy prices.
In late U.S. trading, benchmark 10-year Treasuries notes
were up 9/32 in price for a yield of 2.066 percent,
down 3 basis points. The 10-year yield hit 2.042 percent, which
was its lowest since Oct (HKSE: 3366-OL.HK – news) . 28.
The two-year yield slipped 2 basis points to 0.903
percent after touching its lowest in a month.
The U.S. Treasury Department will sell $13 billion in
30-year supply on Thursday, completing this
week’s $58 billion fixed-rate Treasuries supply.
(Editing by Lisa Von Ahn and Meredith Mazzilli)
This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.