LONDON Feb 21 U.S. 10-year T-note yields fell below 2 percent on Thursday after weaker-than-expected euro zone private activity data prompted investors to buy assets perceived as safe havens.
Prospects that the debt-laden region might soon emerge from recession were shaken as surveys showed business indicators unexpectedly worsened this month, especially in France.
Ten-year T-note yields fell 2.4 basis points to 1.9861 percent, while T-note futures were 9/32 higher at 131-24/32.
"We have risk-off again in the market. If you look in Europe market sentiment is rather poor at the moment due to the poor data," Rabobank strategist Philip Marey said.
"If you look at the 2 percent level, I don't think we get a sharp upward move in the near term."
U.S. bonds weakened briefly on Wednesday as the latest minutes from the Federal Open Market Committee showed policymakers discussed slowing or stopping Federal Reserve bond purchases aimed at reducing unemployment.
They later rebounded as a sharp fall in stock prices rekindled some safe-haven bids for bonds.
Markets will receive a flurry of data later on Thursday including the consumer price index, weekly jobless claims and existing home sales.
There will also be an auction of 30-year Treasury Inflation Protected Securities later on Thursday.