"The 10-year Treasury yield fell below 1.55 percent after disappointing jobless claims data and a weaker first quarter GDP reading spurred a new spree of flight-to-safety buying. Disappointing Chicago PMI was also a factor."
"Rates had already fallen into record territory Wednesday on worries that European policy makers will not act swiftly or definitively enough to stop the spread of contagion from its sovereign debt crisis."
"The latest concerns focus on Spain's troubled economy, its budget deficits and its weakened banking sector."
"The 10-year Treasury yield, in an inverse move, fell through its September low of 1.671 percent as buyers rushed in to bonds Wednesday. The euro was slightly higher Thursday, but its recent trend has been lower against the dollar, which has become a magnet for funds seeking safe haven assets."
“It all focuses the attention on the fact that there isn’t a cohesive plan to deal with institutions in Spain and in Europe that are experiencing deteriorating assets at the same time they are trying to deleverage their balance sheets,” said Zane Brown, Lord Abbett fixed income strategist.
There was some noise from the EU to help Spain in some way:
"European Commission officials Wednesday offered Spain more time to reduce its budget deficit and direct aid form a euro zone rescue fund so it can recapitalize its troubled banks."
More time. There you go. Are they going to give Greece more time or is "their time up?" If it is Spain may not have much hope regardless. There was another idea that sounds like it could be some help:
"The European Union also suggested a plan to help the financial system. The EU executive office said the 17 countries in the euro zone need a “banking union” that can oversee the system centrally and provide bailout assistance, if needed."
No doubt Germany doesn't like it. So while bonds are low, there's no reason to think they're near a bottom just yet.