U.S. Treasury prices rose on Friday with benchmark yields hitting near two-month lows on safe-haven bids for bonds stemming from worries about tightening credit conditions in China and a looming currency crisis in Argentina.
Those worries since Thursday have spurred selling in global stock markets and other riskier investments as investors scrambled into the relative safety of cash and U.S. and German government debt.
"Investor sentiments have felt fragile. Things are spiraling a bit here," said David Keeble, global head of interest rate strategy at Credit Agricole Corporate & Investment Bank in New York.
Beijing's effort to rein in its unhealthy growth in high-risk lending has stoked concerns about how that might impede expansion of the world's second largest economy.
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Argentina meanwhile abandoned support of its currency on the open market this week, resulting in the peso's biggest drop since the 2002 financial crisis. Although chances of Argentina's woes rippling across Latin America are remote, investors are worried this could hurt the currencies of Argentina's major trade partners.
Safety bids for Treasurys stemming from concerns about China and emerging markets were mitigated by caution ahead of next week's $111 billion in longer-dated U.S. government debt supply and the Federal Reserve's two-day policy meeting, analysts and traders said.