The 10-year US Treasury yield rose by more than 20bp in March. The catalysts for a significant sell-off in the first half of the month were another encouraging employment report, reassuring results from the Fed’s latest bank stress tests, and a further fading of fears about the crisis in the euro-zone. But the second half of the month saw Treasuries recover some poise as Fed Chairman Bernanke downplayed the recovery in the US labour market, economic data emanating from the euro-zone and China were disappointingly weak, and concerns began to resurface about Spain’s commitment to fiscal austerity.
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