2014.06.1003:21:30UTC+00Treasurys met with lower demand after optimistic developments in Asia

A better than expected recovery in Japan and a promising return to expansion for Chinese exports have helped cause US Treasury bonds to cheapen and its yields increase. With the rise of these Asian markets and their economies becoming more stable and likelier to benefit investors, safe havens such as those offered by the Treasury has lost some of their allure.

This development falls just ahead of the Treasury’s sale of $28 billion in three year notes, $21 billion in 10 year notes, and $13 billion in 30 year bonds which will all happen on consecutive days this week starting Tuesday. 10 year notes had a yield of 2.611%, 4/32 lower than its previous rate late Tuesday afternoon. It had previously dragged itself back up from its lowest yield in nearly a year of 2.4% during the tail end of May.

In Asia, China’s 7% growth in exports proved sufficient to allay the fear that the world’s second largest economy was slowing down joining Japan, which outperformed its own expectations for the year’s first quarter, to give enough foundation for investors to become optimistic in trading in the market once more.

Meanwhile, the debt market in the European region has been on a tear following the planned stimulus measures of the European Central Bank that were made public last week. Among the biggest winners were 10 year government bonds in Spain whose yields fell below their US Treasury counterpart for the first time in four years. Its yield of 2.568% signifies an increased preference among investors to own Spanish bonds over US notes. The European benchmark of German 10 year bonds was similarly trading under the Treasury level at 1.329% alongside Ireland with 2.407%.

Should the spreads between the eurozone and US yields continue to get smaller, the reputation of Treasurys as the world’s top safe investment will be put to use when investors start choosing where to put their money.