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Treasuries in Largest Weekly Gain in Two Years on Crimea Turmoil

March 14 (Bloomberg) -- Treasuries rose in the biggest weekly gain in almost two years as unrest in the Ukraine drove investors to the safety of U.S. government debt.

The yield on the benchmark 10-year note touched the lowest level in 10 days after Estonian Defense Minister Urmas Reinsalu said Russian President Vladimir Putin is preparing to invade Ukraine as Crimea prepares for a March 16 referendum on splitting from Ukraine after Russia seized the peninsula. Signals of growth slumping in China increased the allure of havens. Producer prices in the U.S. unexpectedly dropped in February, held back by the biggest decrease in the cost of services in almost a year.

“People are a little bit nervous about Ukraine; China is on people’s minds,” said Brian Edmonds, the head of interest- rates trading in New York at Cantor Fitzgerald LP, one of 22 primary dealers that trade with the Fed. “You combine that and it means a monstrous bid for bonds starting yesterday. People need long-end duration now. That’s what people are grabbing.”

Benchmark 10-year yields fell three basis points, or 0.03 percentage point, to 2.61 percent at 8:34 a.m. in New York, Bloomberg Bond Trader data showed. The rate slid 17 basis points this week, the most since the period ended June 1, 2012.

To contact the reporters on this story: Susanne Walker in New York at swalker33@bloomberg.net; To contact the editors responsible for this story: Dave Liedtka at dliedtka@bloomberg.net Kenneth Pringle, Paul Cox

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