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Long-term yields fall to lowest since early 2013

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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The U.S. bond market was closed Monday in observance of the Columbus Day holiday.

U.S. long-dated Treasuries debt yields fell to the lowest levels in more than a year on Friday with concerns persisting about global economic growth, while short-dated yields edged lower on short-covering in the wake of the Federal Reserve meeting minutes published on Wednesday.

Weak German economic data and the International Monetary Fund's third cut to its global growth forecasts this year have fueled fears about the health of economies in Europe in particular this week, and prompted some safe-haven bids for U.S. 30-year Treasury bonds.

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"Concern of a global slowdown is still lingering from earlier this week and weighing on the market," said Dimitri Delis, fixed-income strategist at BMO Capital Markets in Chicago.

U.S. 30-year yields, which were as high as 3.38 percent less than a month ago, fell to 3.016 percent Friday, their lowest level since May 2013.

Prices were up slightly for Treasuries with maturities ranging from one to three years also, supported by traders buying back those notes they had bet against, or shorted, in the run-up to Wednesday's publication of the minutes of the last Federal Reserve policy meeting. U.S. five- and seven-year note prices also rose slightly.

The traders' expectation that the minutes would show a more hawkish tilt on raising interest rates failed to materialize forcing some covering of short positions.

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"The major catapult was the FOMC minutes Wednesday" said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York. "Now a lot of short bets against short- to-intermediate maturities are being questioned."

Traders shrugged off Labor Department data showing U.S. import prices fell 0.5 percent and export prices fell 0.2 percent in September.

Benchmark 10-year U.S. Treasury notes were last up 8/32 in price to yield 2.30 percent, from a yield of 2.33 percent late Thursday. The yield, which was on track for its biggest weekly drop since Sept. 2013, was also on track to close at its lowest level since June 2013.

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U.S. 30-year Treasury bonds were last up 24/32 to yield 3.024 percent, from a yield of 3.06 percent late Thursday and hovering near its earlier low. The 30-year yield was on track for its biggest weekly drop since July.

U.S. three-year notes were last up 2/32 in price to yield 0.89 percent, from a yield of 0.92 percent late Thursday. The yield, which was on track for its biggest weekly drop since Sept. 2013, was also on track to close at its lowest level since mid-August.

U.S. five-year notes were last up 4/32 to yield 1.54 percent, and were on track to close at their lowest yield since mid-August.

On Wall Street, the benchmark S&P 500 stock index closed down 1.15 percent.