U.S. 10-year yield close to 2-week low on Europe economy concern

Economic Data

Germany’s exports gained 0.3% from November, when they fell 2.2%, the Federal Statistics Office in Wiesbaden said today. Economists forecast a 1.4% increase, according to the median of 15 estimates in a Bloomberg News survey.

“Jitters in Europe have interrupted the rally in riskier assets and Treasuries are benefiting,” said Nick Stamenkovic, a strategist at RIA Capital Markets Ltd. in Edinburgh.

The U.S. trade gap shrank 20.7% to $38.5 billion, lower than any estimate in a Bloomberg survey of 73 economists and the least since January 2010, Commerce Department figures showed today in Washington. The jump in fuel sales to overseas buyers, combined with purchases of the fewest barrels of imported crude in almost 16 years, led to the smallest petroleum deficit since August 2009.

“It might be an improvement for the fourth quarter gross domestic product numbers,” Guggenheim Partners’ Rogan said. “We are continuing to see the economic news out of the U.S. gaining a little bit of steam but it’s nowhere near where it needs to be.”

The world’s biggest bond dealers are growing more reluctant to hold Treasuries, based on Federal Reserve data.

Goldman Sachs Group Inc., JPMorgan Chase & Co. and the rest of the 21 primary dealers of U.S. government securities cut their holdings to $72 billion as of Jan. 30, the least since October, the Fed reported yesterday.

The figure compares with $146 billion on Dec. 19, the most in data compiled by Bloomberg dating back to 1997.

U.S. sovereign debt has returned 0.2% this month, according to a Bank of America Merrill Lynch index. It handed investors a 1% loss in January, the worst start to a year since 2009 on signs the U.S. economy is improving.

Bloomberg News

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