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Bonds rise as investors eye earnings, global data

In this Sept. 24, 2014 photo, traders work in the ten-year bond pit on the floor of the CME Group in Chicago.
M. Spencer Green | AP Photo
In this Sept. 24, 2014 photo, traders work in the ten-year bond pit on the floor of the CME Group in Chicago.

U.S. Treasurys prices rose on Wednesday, breaking a four-day run of losses, as disappointing Japanese exports revived worries about sputtering world growth and dimmed prospects for a quick hike in U.S. interest rates.

The 30-year long bond posted the strongest gains and jumped more than 1 full point to yield 2.87 percent versus 2.92 percent last on Tuesday.

Japan's Ministry of Finance data showed exports rose just 0.6 percent in the year to September, against a 3.4 percent gain expected by economists in a Reuters poll.

Shrinking sales to China, the world's second-largest economy, hurt the volume of shipments, while the data fed fears that weak overseas demand may have pushed the Japanese economy into recession.

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Yield
 
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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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China's economic growth has dipped below 7 percent for the first time since the global financial crisis, and the knock-on effects of the slowdown are spreading through Asia.

"That's all keeping the Federal Reserve from raising rates," said Mary Ann Hurley, vice president of fixed income trading at D.A. Davidson in Seattle. "The market has little to hang its hat on. There are no economic indicators today and Fed speakers are thin."

Fed policymakers considering the first hike in America's near-zero short term rates in nearly a decade meet next week after blunting widespread expectations of an increase in rates at the Federal Open Market's September session.

Expectations of a rate hike next week are low but the FOMC's statement and economic assessments to be issued at the meeting's end on Oct. 28 often rattle markets.

Trading was also slowed by Thursday's meeting of the European Central Bank, which may throttle up its quantitative easing (QE) bond buying program, and a news conference by the ECB president Mario Draghi, according to CRT Capital analysts David Ader and Ian Lyngen.

"Expectations are for no change in the ECB's current QE program - launched in March and currently scheduled to go through September 2016," the analysts wrote. "That said, sentiment has shifted in favor of an expansion of the program sometime within the next several months."

The bellwether 10-year Treasury was up 12/32 in price and yielding 2.03 percent.

U.S. three-year Treasury notes were ahead 1/32 in price to yield 0.90 percent. U.S. five-year notes were up 5/32 and yielding 1.35 percent.

German 10-year yields -- the euro zone benchmark -- were 3 basis points lower on Wednesday at 0.59 percent, having touched 0.63 percent during Tuesday's sell-off.