U.S. intermediate- and long-dated Treasury yields hit their lowest in over two weeks on Tuesday after further declines in oil prices underscored mild inflation, while weak U.S. economic data pointed to a more dovish Federal Reserve.
The weakness in oil prices helped push yields on Treasurys maturing within 7 to 30 years to their lowest since March 2. Longer-dated Treasurys benefit from signs of mild inflation, since inflation erodes the value of interest payouts.
Brent crude slipped for a fourth straight session, falling below $53 a barrel in choppy trade, hovering near a 1-1/2-month low hit Monday.
``Ongoing weakness in crude oil in the last week is friendly to the long end of the market, just as the weaker data lately is,'' said Lou Brien, market strategist at DRW Trading in Chicago.
Data showing U.S. housing starts tumbled 17 percent to their lowest in a year in February was the latest indication the economy hit a soft patch in the first quarter.