* Greece, Ukraine elections spur safe-haven bids
* Strong April U.S. new home sales impact muted
(Updates prices, adds fresh analyst comments)
By Sam Forgione
NEW YORK, May 23 U.S. Treasuries prices rose on
Friday on uncertainty ahead of Sunday's European Union and
Ukraine elections, which overshadowed stronger-than-expected
U.S. housing data and spurred safe-haven bids.
Traders sought safe-haven bonds on the belief that the
elections could result in market volatility, including renewed
worries of a Greek exit from the euro zone and the potential
for greater geopolitical concerns surrounding Russia and
"(Russian President) Putin doesn't see the Ukraine
government as legitimate, therefore there's a possibility that
Putin might not see the elections as legitimate," said Michael
Wallace, global market strategist at Action Economics in San
Traders also said there was a risk that, if Greece's leftist
Syriza party wins, its leaders could reject the government's
austerity policies and threaten to leave the euro zone.
The European Union's parliamentary election kicked off on
Thursday. Greece's leftist Syriza party performed strongly in
key races in the first round of local elections on May 18. [ID:
Data showing that sales of new U.S. single-family homes rose
more than expected in April failed to derail safe-haven demand
The Commerce Department said new U.S. single-family home
sales increased 6.4 percent to a seasonally adjusted annual rate
of 433,000 units, ending two straight months of declines.
March's sales pace was revised up to 407,000 units from a
previously reported 384,000 units.
A decline in new home sales in the U.S. Northeast suggested,
however, that the rebound in the economy after a harsh winter
has not been as solid as many had hoped, said Wallace.
Traders also focused on the European Central Bank's policy
meeting on June 5, where policymakers could decide to cut
interest rates further to stop the euro from rising and
inflation from falling any further.
"We know the ECB is going to be easing in some measure,"
said Eric Green, global head of rates and FX research at TD
Securities in New York. He said the likelihood of lower interest
rates on international government bonds such as German bunds has
made U.S. Treasuries yields more attractive.
U.S. Treasuries are "a table-pounding strong buy in a world
starved for yield," Green said.
Treasuries prices held their gains throughout the day,
partly because of reluctance to make bets ahead of the holiday
weekend, traders said. U.S. financial markets will be closed on
Monday for the Memorial Day holiday.
Prices on 30-year Treasury bonds were last up
18/32 to yield 3.398 percent, from a yield of 3.429 percent late
Thursday. Benchmark 10-year U.S. Treasury notes were
last up 5/32 to yield 2.536 percent, from a yield of 2.555
percent late Thursday.
On Wall Street, the S&P 500 last traded up 0.44
percent, boosted by the U.S. housing data.
(Reporting by Sam Forgione; Editing by Dan Grebler)