* Ten-, 30-year debt post biggest price gains
* Surprisingly strong U.S. productivity data shrugged off
By Michael Connor
NEW YORK, Aug 8 U.S. Treasuries climbed again on
Friday, leaving benchmark yields at 14-month lows, amid a
sell-off in global equities markets after President Barack Obama
ordered targeted air strikes in Iraq.
The air strikes fueled investor anxieties already heightened
by the Ukraine crisis, tit-for-tat economic sanctions between
Russia and the West, and Argentina's unresolved debt default.
Fighting also resumed in Gaza between Palestinian militants
Benchmark Treasury 10-year notes, whose yields
were topping 2.50 percent on Tuesday, were up 9/32 in price in
early New York trade and were yielding 2.3951 percent.
Earlier, the issue yielded 2.349 percent, a level last seen
during June, 2013, according to Reuters data.
"It's a big flight to quality trade," said Charles Comiskey,
head of Treasury trading for Scotia Bank in New York. "It's a
rudderless, leaderless world everywhere. There is a lot of fear,
and the fear is driving people to the Treasury market."
Thirty-year Treasury bonds also rose again, up
13/32 in price to yield 3.212 percent. The long bond on Friday
had yielded as little as 3.178 percent, its lowest since June
Price gains in shorter maturities were smaller.
With investors focused on geopolitical matters, Treasuries
trading is little affected by economic data, strategist and
portfolio managers say.
On Friday, price gains pulled back only briefly on
better-than-forecast data showing a 2.5 percent increase in U.S.
productivity growth during the second-quarter. The report
bolsters arguments Federal Reserve policymakers will raise
interest rates sooner than investors believe.
"I don't think you have any fundamentals behind it,"
Comiskey said of this week's rally in Treasuries. "With our
economy the way it is and Fed policies, I don't think you can
make a case that we really should be here."
(Editing by W Simon)