Disappointing US economic data added to a bid for the debt ahead of a closely watched employment report due out on Friday.
The European Central Bank stepped up pressure on Thursday for a joint fund to guarantee bank deposits in the euro zone, saying Europe needed new tools to fight bank runs as the bloc’s debt crisis drives investors to flee risk.
With the crisis now battering Spain, the European Commission said on Wednesday a vicious cycle of weak banks and heavily indebted states lending to each other must be broken and proposed a joint bank deposit system to prevent a bank run.
“There is money exiting those bond markets quickly and looking to get cash,” said Sean Murphy, a Treasuries trader at Societe Generale in New York. “The market continues to look for the big bazooka to be fired to alleviate some of the fear mode that we’re in.”
Benchmark 10-year Treasuries yields fell to fresh lows of at least 60 years, trading as low as 1.593 percent. The yields have fallen from 2.37 percent in mid-March as concerns that Europe’s problems would accelerate added a bid for the safe-haven debt.
Europe is expected to remain the dominant focus even as a slew of US data on Thursday pointed to sluggish growth.
New claims for unemployment benefits rose last week for the fourth straight week, while US private employers created 133,000 jobs in May, fewer than expected.
US economic growth was also a bit slower than initially thought in the first quarter as businesses restocked shelves at a moderate pace and government spending fell sharply.
The May US payrolls report on Friday is expected to show employers added 150,000 positions in May.
The Federal Reserve on Thursday will buy as much as $2 billion in debt maturing between 2036 and 2042 as part of its Operation Twist schedule.
This program involves buying longer-dated debt and funding the purchases with sales of short-dated notes in a bid to lower long-term borrowing costs and stimulate the economy.
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Spot gold was steady at $2,317.41 per ounce after staying mostly in negative territory earlier in the day
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Hundreds of social workers and volunteers are working round the clock, providing essentials to those affected by the unprecedented rainfall
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