TREASURIES-Spain worries push 10Y yields to historic lows

Wed May 30, 2012 2:24pm BST

 (Updates market actions, adds details)	
 NEW YORK, May 30 (Reuters) - The yield on benchmark U.S.
10-year Treasury notes fell to its lowest level in at least 60
years on Wednesday as contagion worries about the Spanish
banking system intensified bids for U.S. government debt and
other low-risk investments.  	
 The 10-year Treasury yield last traded at
1.658 percent, at least a 60-year low based on monthly figures
gathered by Reuters.	
 The yield on 30-year Treasury bonds was at
2.75 percent, the lowest since October 2011 according to
Tradeweb.	
 U.S. and German government yields declined as the yield on
10-year Spanish sovereign debt rose to six-month
highs on concerns over how Spanish banks will obtain capital to
stay afloat. 	
 "The fundamental question is where the money is going to
come from to support the Spanish banks and on what terms," said
Jim Vogel, interest rate strategist with FTN Financial in
Memphis, Tennessee.	
 On Wednesday, the European Commission advocated direct aid
from a euro zone rescue fund to recapitalize distressed banks in
an effort that could eventually help Spain. 	
	
 (Reporting by Richard Leong; Editing by Andrew Hay)