“Treasuries rose, pushing 10-year yields to a one-month low, as polls indicated the euro area’s third-largest economy, Italy, may be left with a hung parliament, stoking refuge demand.
U.S. debt gained as preliminary results from Italian elections show former Prime Minister Silvio Berlusconi may have built a blocking minority in the Senate to deny outright victory to opponent Pier Luigi Bersani. Treasuries remained higher after the U.S. sale of $35 billion in two-year notes.
“The concern is that Berlusconi will take off the austerity measures,” said Jason Rogan, director of U.S. government trading at Guggenheim Partners LLC, a New York-based brokerage for institutional investors. “It’s not set in stone, but it’s brought in heavy buying.”
The benchmark 10-year yield dropped five basis points, or 0.05 percentage point, to 1.92 percent at 1:22 p.m. New York time, according to Bloomberg Bond Trader prices, reaching the lowest since Jan. 25. The 2 percent note maturing in February 2023 added 13/32, or $4.06 per $1,000 face amount, to 100 3/4.
