Treasury prices edge up on China, Europe slowdown

AP News
Posted: Apr 02, 2012 4:55 PM

Treasury prices edged slightly higher Monday. Investors were reluctant to abandon the safety of U.S. government bonds after weak reports on manufacturing elsewhere in the world coupled with conflicting economic reports from the U.S.

The price of the benchmark 10-year Treasury note rose 28.1 cents for every $100 invested Monday, sending its yield slightly lower to 2.19 percent, from 2.22 percent late Friday.

Earlier in the day, separate surveys in China and Europe showed that manufacturing in those parts of the world might be contracting.

A survey conducted in China by international bank HSBC recorded its lowest average reading in three years for export activity in the first quarter.

A survey of European manufacturing executives by financial data firm Markit fell to a three-month low, while Europe's statistics bureau said that unemployment in the 17 countries that use the euro has risen to 10.8 percent, the highest level since the launch of the euro in 1999.

In the U.S. strong manufacturing data was tempered with a slowdown in building.

The Institute for Supply Management said that its index of manufacturing activity rose strongly last month to a nine-month high.

However, U.S. builders trimmed activity for a second straight month in February, pushing construction spending down by the largest amount in seven months.

The weakness underscored how much the nation's construction industry continues to struggle even as the economy recovers from the Great Recession brought in part by the collapse of the housing market following an unsustainable boom in that sector a few years ago.

The price of the 30-year Treasury bond on Monday also fell 28.1 cents per $100 invested, nudging its yield down to 3.33 percent from 3.34 percent from 3.28 percent.

In other trading, the yield on the two-year Treasury note fell to 0.32 percent, from 0.33 percent. The yield on the three-month T-bill rose to 0.06 percent from 0.07 late Friday.