U.S. Treasuries are poised for their biggest weekly gain in five months as demand for fixed income soared amid a global selloff in equities and concern that inflation will slow.
Ten-year notes also drew support from signs the Federal Reserve will keep interest rates close to zero for longer, and from a decline in oil prices that helped push a gauge of inflation expectations toward its lowest since 2010. Government debt from Australia to Britain also gained this week, driving the average yield on developed-nation bonds to a three-month low.
“It’s money wanting to be put in dollars and Treasuries,” said Charles Comiskey, head of Treasury trading in New York at Bank of Nova Scotia, one of 22 primary dealers that trade with the Fed. “Until the Fed pulls the trigger, the market will have a hard time believing they will raise rates.”
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