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Bunds · Economic Weakness · Risk Aversion · Treasurys
U.S. government debt prices rose as investors sought lower-risk assets due to concerns over European economic weakness and slowing growth in the United States.
While U.S. consumer spending and income figures met expectations, the overall U.S. economic growth pace slowed. Spain's economy contracted, intensifying recession worries in the Euro zone, further exacerbated by credit rating downgrades for Spanish banks.
Benchmark 10-year Treasury notes and 30-year bonds saw price increases, leading to lower yields. German Bunds also saw demand, though U.S. Treasurys slightly lagged.
Analysts anticipate month-end portfolio rebalancing to support bond prices. The Federal Reserve's "Operation Twist" program, aimed at lowering long-term borrowing costs, also provided support for longer-dated Treasuries.
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