* Uncertainty over Trump, Fed, Europe push Treasury yields
* 5-year yields hit lowest since December
* 7- and 10-year yields hit lowest since mid-January
(Updates to U.S. afternoon trading, adds quote, data)
By Dion Rabouin
NEW YORK, Feb 8 U.S. Treasury yields fell to
their lowest levels in multiple weeks on Wednesday with 5-year
note yields hitting their lowest since Dec. 8 as a flight to
safety and technical positioning encouraged investors to buy
U.S. government debt.
Yields on 7-, 10- and 30-year Treasuries fell to their
lowest levels since mid-January.
Buying has picked up this week as analysts say the market is
reducing its expectations of the number of forthcoming interest
rate hikes from the U.S. Federal Reserve and of fiscal stimulus
policies and tax cuts from the administration of President
Uncertainty about European politics also sent a wave of
overseas buyers to Treasuries, which offer a sizeable yield
premium over government bonds from countries in Europe.
"Across the developed world the U.S. is still pretty much
the high-yielding choice and I would argue the U.S. economy is
by-far the strongest of those choices," said Dominic Pappalardo,
director of the taxable portfolio management team at McDonnell
Investment Management in Oakbrook, Illinois.
"If you're in much of Europe or Asia where you have rates
near zero as well as a tremendous amount of economic
uncertainty, so getting 2-1/2 percent on your money is really,
Recent polls have shown German Chancellor Angela Merkel
falling behind a candidate from the country's Social Democrats
in this year's elections. Polls have also suggested France's
Marine Le Pen, who has championed pulling the country out of the
European Union, is gaining steam.
"People are saying, 'I don't know what's going on over in
Europe and I want to get into something safer, most notably U.S.
Treasuries,'" said Stan Shipley, a strategist at Evercore ISI.
Shipley also noted that benchmark 10-year note yields have
drifted below their 50-day moving average and a couple key
technical levels, increasing buying.
Further, there has been an absence of positive data on the
U.S. economy to offset the flight to safety, Pappalardo said.
Yields pared their losses modestly after a weak 10-year note
auction, but remained lower.
The 10-year note was last up 9/32 in price to
yield 2.358 percent.
(Reporting by Dion Rabouin; Editing by Andrea Ricci and Diane