* Kerry remarks send yields lower
* Weak China growth supports safe-haven demand
* U.S. jobless claims lowest since late November
By Sam Forgione
NEW YORK, March 13 Longer-dated U.S. Treasuries
prices rallied to their highest levels in over a week on
Thursday on heightened tensions over a U.S.-European response
against Russia if a referendum in Ukraine's Crimea region goes
U.S. Secretary of State John Kerry said Thursday that a
"serious series of steps" would be imposed on Monday by the
United States and Europe if a referendum on Crimea joining
Russia takes place on Sunday as planned.
Russia also launched new military exercises near its border
with Ukraine, showing no sign of backing down in its plans to
annex its neighbor's Crimea region despite a stronger than
expected drive for sanctions from the EU and United States.
The flaring tensions between the U.S. and Russia contributed
to a risk-off tone, said Gabriel Mann, U.S. Treasuries
Strategist at RBS Securities in Stamford, Connecticut.
Continued concerns over China's economic growth also worried
investors. Growing jitters about the financial health of bloated
industries in China have prompted many banks to cut lending in
these sectors by as much as 20 percent, sources said.
China's industrial output rose 8.6 percent in the first two
months of 2014 from a year earlier, the National Bureau of
Statistics said on Thursday, missing market expectations for a
9.5 percent rise, while growth in retail sales was the slowest
in three years.
The benchmark 10-year U.S. Treasury note last
traded up 19/32 in price to yield 2.658 percent, up in price
from late Wednesday, when the yield was at 2.726 percent.
Bond yields move inversely to their prices.
The yield on the 30-year Treasury bond,
meanwhile, last traded up 1-2/32 in price to yield 3.609
percent, up from 3.668 percent late Wednesday.
The rise in prices on longer-dated Treasuries to their
highest since March 4 erased a dip earlier in the day after the
release of better-than-expected U.S. retail sales and jobless
The Commerce Department said retail sales increased 0.3
percent last month as receipts rose in most categories, ending
two straight months of declines, while the Labor Department said
initial claims for state unemployment benefits dropped 9,000 to
a seasonally-adjusted 315,000 last week, marking the lowest
reading since late November.
The drop in new claims for unemployment benefits and the
rise in retail sales, which for about 30 percent of consumer
spending, indicated that the U.S. economy could be gaining
traction after frigid temperatures disrupted economic activity
at the end of 2013 and the start of this year.
"The data is consistent with a rebound taking place," said
Jake Lowery, fixed income portfolio manager with ING U.S.
Investment Management in Atlanta.