(Updates prices; adds context of financial concerns)
By Harry Robertson and Dhara Ranasinghe
LONDON, March 24 (Reuters) – U.S. Treasury yields fell sharply to their lowest levels since September on Friday as nagging concerns about turmoil in the banking sector sent investors fleeing to safe-haven government debt.
Two-year Treasury yields were last down 19 bps at 3.62% , having earlier dropped to 3.566%, the lowest since mid-September. Yields fall as prices rise, and vice versa.
The 10-year U.S. Treasury note was down 10 bps to 3.302%. It earlier touched 3.285%, also a six-month low.
European bank stocks dropped as concerns about the health of the sector picked up once again on Friday.
Investors have been on edge since the collapse of U.S. lenders Silicon Valley Bank and Signature Bank in mid-March, which was followed by UBS’ emergency purchase of its ailing rival Credit Suisse on Sunday.
Investors were particularly concerned about Deutsche Bank , whose shares were last down 13.7% on Friday.
“It’s the bank worries and turbulence that is now affecting fixed income,” said Jussi Hiljanen, head of rates strategy at SEB, a bank.
“In general markets are quite worried and are focusing on the potential next domino.” He said there was a “flow to safety” driving up government bond prices. (Reporting by Harry Robertson and Dhara Ranasinghe, Editing by Raissa Kasolowsky)
