LONDON Feb 8 U.S. Treasury debt prices were
pulled higher in Europe on Friday by a surge into German Bunds
as comments by the head of the European Central Bank on the
strength of the euro prompted rate-cut speculation.
* After the ECB left interest rates unchanged at 0.75
percent on Thursday, its president Mario Draghi said he will
monitor the impact of a strengthening euro on the economy, going
further than most analysts were expecting.
* Treasuries reversed earlier losses posted in Asia after
better-than-forecast trade data from China confirmed a recovery
is under way in the world's second-largest economy.
* "Pretty impressive little rally following Draghi. His
concerns over the strength of the euro and then the euro got hit
on the back of that, and Bunds were off to the races dragging us
up," said Craig Collins, a trader at Bank of Montreal in London.
* U.S. 10-year T-notes were last up 2/32 in price to yield
1.94 percent, 2 bps less than in late New York trade
* Concerns about potential political instability in Spain
and Italy helped offset the impact on low-risk bonds of U.S.
data showing an improvement in the labour market, with the
number of Americans filing new claims for jobless benefits
falling last week.
* "There is some better buying that has happened from real
money guys. Guys who were trying to short this market through
that 2 percent level, and it hasn't really seemed to have
worked, so we definitely have a bit of a move on here," another
* "Peripherals continue to move a little bit wider and if
you see pressure back on the periphery it's goign to be
difficult to be short Treasuries here at the moment," the trader
* The 30-year U.S. T-bond yield was last 1.5 bps
down at 3.16 percent.