* Safety bid lifts U.S. Treasuries prices
* Better-than expected U.S. economic data temporarily pares
* Fed bought $2.63 billion in debt maturing between 2022 and
By Marina Lopes and Karen Brettell
NEW YORK, March 3 U.S. Treasury debt prices rose
on Monday as Russia's military intervention in Ukraine increased
demand for safe-haven investments like U.S. government debt,
pushing yields to the lowest in almost a month.
Russia took a financial hit over its military intervention
in neighboring Ukraine, with its stocks, bonds and currency
plunging as President Vladimir Putin's forces tightened their
grip on the Russian-speaking Crimea region.
Tension in the region drove Treasury volume up overnight and
sent 10-year yields to 2.5920 percent, the lowest since Feb. 4.
"Obviously, Ukraine is first and foremost on participants'
minds right now. What is really driving things is the
flight-to-quality bid," said David Coard, head of fixed income
sales and trading for Williams Capital Group in New York.
Volatility in emerging markets and disappointing economic
data has pushed yields lower than what some traders and analysts
see as fair value.
"There's a lot priced in already. Even though the data
hasn't been as strong as people hoped, it's still not nearly as
poor to justify 2.60 percent on 10-year yields," said Aaron
Kohli, an interest rate strategist at BNP Paribas in New York.
BNP sees 10-year note yields as fairly valued at between 3
percent and 3.25 percent, though Kohli noted that yields could
fall further from current levels if there is an escalation in
the Ukrainian conflict or new weakening in the U.S. economy.
"A lot of what we're seeing right now might have been
started by an emerging market blowup in Asia, but certainly the
Ukrainian situation has added to the concerns and it's been
mostly responsible for the move from around 2.75 percent to
around 2.60 percent," Kohli said.
Ten-year notes were up 15/32 in price, sending
yields down to 2.608 percent, from Friday's close of 2.66
percent. Thirty-year bonds rose 23/32 in price,
pushing yields down to 3.556 percent from Friday's close of
Prices temporarily pared gains after U.S. manufacturing
growth rebounded in February, coming off an eight-month low,
helped by a recovery in new orders. U.S.
consumer spending also rose more than expected in January,
likely as chilly weather boosted demand for
"The economic data looks fairly healthy and stronger than
expected, suggesting that concern about the Ukraine and any
spillover effect may be offsetting any selling pressure these
numbers might have caused," said Coard.
The Federal Reserve bought $2.63 billion in debt maturing
between 2022 and 2023 as part of its continued bond buying
Traders await nonfarm payrolls data due on Friday for a
stronger indication of the country's economic strength.
"People will be looking to see if the labor market has been
able to bounce back from the recent disappointing numbers," said