Bloomberg News

U.S. Bonds Hold Biggest 3-Day Gain Since 2008 on Europe Outlook

November 01, 2011

Nov. 2 (Bloomberg) -- Treasury 30-year bonds held their biggest rally since 2008 on speculation a European plan to solve the region’s debt crisis is faltering.

“The core problems still exist in Europe,” said Zeal Yin, a money manager at Taipei-based Shin Kong Life Insurance Co., Taiwan’s second-largest life insurer with the equivalent of $39.9 billion in assets. “The global economy is starting to cool. If the problems persist, record low yields are possible by year-end.”

The 30-year rate was little changed at 3 percent as of 9:45 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 3.75 percent security due in August 2041 changed hands at 114 23/32.

The yield has fallen 46 basis points from Oct. 28 through yesterday, the biggest three-day slide since November 2008, according to data compiled by Bloomberg.

Benchmark U.S. 10-year rates were at 2 percent. The record low was 1.67 percent in September.

--Editors: Nate Hosoda, Benjamin Purvis

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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