April 5, 2012 / 1:12 PM / 5 years ago

TREASURIES-US bonds gain as Europe fear spurs safety bid

By Karen Brettell	
    NEW YORK, April 5 (Reuters) - U.S. Treasuries prices gained
on Thursday as a flare-up of euro zone debt fears added a safety
bid for the bonds and traders awaited a key employment number on
Friday for further signs of the strength of the U.S. economic
recovery.	
    Spain's bond yields rose further on Thursday as investors
worried about the country's ability to meet budget targets, a
day after an auction of the country's debt saw weak demand.	
    Renewed concerns in Europe boosted demand for safety assets
including U.S. Treasuries.	
    "The whole European situation seems to be reheating itself
and there is more safe-haven type buying," said Sean Murphy, a
Treasuries trader at Societe Generale in New York. 	
    U.S. government bonds have now fully retraced a selloff on
Wednesday when investors were disappointed that minutes from a
U.S. Federal Reserve meeting did not give indications of further
monetary policy easing.	
    "Investors are maybe having a little rethink, and thinking
that the selloff might have been overdone," Murphy said.	
    Treasuries pared some price gains on Thursday after data
showed that the number of Americans lining up for new jobless
benefits fell to the lowest in nearly four years last week.
 	
    Investors are now focused on Friday's closely watched
payroll employment, which is expected to show that U.S.
employers added 203,000 jobs in March.	
    Fed Chairman Ben Bernanke said last week that the modest
pace of U.S. growth was unlikely to cut unemployment quickly and
that further stimulus remains an option.	
    Benchmark 10-year Treasuries were last up 15/32
in price to yield 2.17 percent, down from 2.22 percent late on
Wednesday. Five-year notes increased 6/32 in price to
yield 1.00 percent, down from 1.04 percent.	
    Thirty-year bonds were up a point in price to
yield 3.30 percent, down from 3.36 percent late on Wednesday.

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