Investors have poured into the world’s safest government securities amid Europe’s debt crisis. Germany’s borrowing costs dropped to the least on record today at a sale of 4.15 billion euros ($5.1 billion) of 10-year debt. The nation sold the securities at a yield of 1.31 percent, down from 1.52 percent at a June 13 sale, according to a statement from the Bundesbank.
While U.S. economic growth slowed to a 1.9 percent annual rate in the first quarter, it will quicken to 2.5 percent in the fourth, according to Bloomberg surveys of financial companies.
Treasuries rose yesterday as concern Europe’s financial woes are slowing U.S. growth led to higher-than-average demand at a $32 billion sale of three-year notes.
The securities attracted bids for 3.52 times the amount offered, compared with the average of 3.45 for the previous 10 sales. A $13 billion 30-year auction tomorrow will complete this week’s supply.
A U.S. report on July 6 showed the economy added 80,000 jobs in June, less than the 100,000 projected by a Bloomberg News survey of economists.
Treasuries have returned 2.5 percent this year, according to Bank of America Merrill Lynch indexes. A gauge of U.S. investment-grade and high-yield company bonds gained 6.5 percent, the data show.
“Yields look set to retest the early-June lows,” said Peter Jolly, head of market research at National Australia Bank Ltd. in Sydney. “There’s an ongoing muddling in Europe, and weakening global growth is being priced into Treasuries.”
The Fed has pledged to keep its benchmark interest rate near zero at least through late 2014.