In addition, overseas demand for more attractive U.S. government yields has also helped support the Treasuries market. For instance, the yield spread between U.S. Treasuries and German bunds narrowed from a three-week high of 160 basis points, Bloomberg reports. Yields on 10-year German bunds were at 0.14% on Thursday.
“Why buy a German bund when you can pick up 150 basis points more in U.S. Treasuries?” Richard Kelly, global head of strategy at Toronto Dominion Bank, asked.
The search for safety has also pushed Japanese bond yields further into negative territory. Yields on 10-year Japanese Government Bonds were at -0.08% on Thursday.
“While these yield levels are a bit stretched, some people are just not buying negative-yield assets,” David Schnautz, a fixed-income strategist at Commerzbank AG, told Bloomberg. “So, the simple fact of offering positive yields is a strong supportive factor for Treasuries.”
iShares 7-10 Year Treasury Bond ETF
Max Chen contributed to this article.