Treasuries rose, set for a weekly gain, amid concern Greeks will elect a government hostile to the terms of its bailout and before U.S. reports that may show production slowed and consumer confidence fell.
Ten-year notes outperformed similar-maturity German bunds as investors favored securities from outside the euro area. Greeks vote in two days after a previous ballot on May 6 failed to yield a government. Two-year U.S. note yields declined for the first time in 10 days as the Federal Reserve meets June 19-20 amid mounting evidence growth is slowing. The central banks of major economies are preparing for coordinated action to provide liquidity if needed, Reuters reported yesterday.
“The key driver of the allure of Treasuries is as a non- euro safe-haven ahead of the looming Greek election,” said Michael Leister, a rates strategist at DZ Bank AG in Frankfurt. “It looks like investors want to play it safe and feel more comfortable with Treasuries at the moment.”