NEW YORK (MarketWatch) — Benchmark Treasury yields dropped to their lowest level since late August as investors shunned risk in favor of perceived safety of U.S. government debt on Tuesday.
The 10-year Treasury note 10_YEAR, -1.53% yield, which falls as prices rise, was down 4 basis points on the day at 2.387%. The last time the yield closed below that level was Aug. 29, according to Tradeweb.
Here’s what is fueling the risk-off trade:
U.S. stocks sank as investors remained on edge ahead of what could be a disappointing earnings season.
German industrial production data stoked fears that a return to recessionary conditions is at hand.
The International Monetary Fund cut its growth outlook again as recoveries in Europe and Japan slowed.
U.S. data said job openings rose to 4.84 million in August, compared with 4.61 million in July.
Investors are also preparing for a trio of U.S. Treasury note auctions this week, which kick off with a $27 billion sale of 3-year notes 3_YEAR, -2.69% , part of $61 billion in total sales.
Strategists at Nomura Securities said they expected “decent” demand at the auction, but noted that “the 3-year outperformed on the curve during Monday’s rally, which may have crowded out some buy-the-dip demand.”
The 30-year bond 30_YEAR, -1.15% yield dropped 3 basis points to 3.098% and the 5-year note 5_YEAR, -2.41% yield fell 3 basis points to 1.663%.
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