Treasuries Surge on Refuge Demand as Auctions Set Records

Treasury yields fell close to all- time lows as an almost insatiable desire for the safest assets amid signs global growth is stalling helped the U.S. draw record rates at 10- and 30-year debt auctions.

U.S. government debt rallied for a third consecutive week as Europe’s economy slipped toward its second recession in three years amid a worsening debt crisis, lower-than-forecast growth in China and the Federal Reserve disappointing some traders looking for a hint of more stimulus. Fed Chairman Ben S. Bernanke will present his semi-annual report on the outlook for the economy and monetary policy to Congress on July 18.

“Debt sales were strong even though yields were not far off their record lows, which underscores the fear in investor sentiment,” said Christopher Sullivan, who oversees $1.9 billion as chief investment officer at United Nations Federal Credit Union in New York. “The flight-to-quality demand is still high given the economic slowing in the U.S. and around the world, and the fact that we are no closer to a European resolution.”

The yield on the 30-year bond fell nine basis points, or 0.09 percentage point, on the week to 2.57 percent in New York time, according to Bloomberg Bond Trader prices. It touched a record low of 2.5089 percent on June 1.

The benchmark 10-year note yield declined six basis points to 1.49 percent. It touched its lowest, 1.4387 percent, also on June 1.