Treasuries are getting a taste of what life may be like as the world’s biggest economy improves. U.S. government securities tumbled yesterday as a report showed manufacturing grew at the fastest pace in three years. Investors’ focus on the economy marks a shift from August, when unrest in Ukraine drove demand for the safest securities and as forecasts for the European Central Bank to cut borrowing costs enhanced the attractiveness of the payments on America’s debt.
“The fundamentals tell us that Treasury yields should be higher,” said Will Tseng, a bond fund manager in Taipei at Mirae Asset Global Investments Co. “When the Ukraine crisis gets better or the ECB announces what it’s going to do, then the things dragging Treasury yields down will disappear.”
The U.S. 10-year yield was little changed at 2.43 percent as of 11:22 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 2.375 percent note maturing in August 2024 was 99 17/32.
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