BOND REPORT: Oil Slump Drags 10-year Treasury Yield Lower

By Joseph Adinolfi, MarketWatch

NEW YORK (MarketWatch) -- The 10-year Treasury yield continued its fall below 2% on Monday, as another plunge in crude-oil prices suppressed investors' appetite for risky investments like stocks and pushing money instead into the safety of bonds.

The benchmark 10-year yield (10_YEAR) shed 2.1 basis points to 1.948%, according to Tradeweb data. Bond prices move inversely to yields.

The 10-year yield has steadily moved lower for the past two weeks as investors have sought safer places for their money. It has fallen in nine of the past 10 sessions, and last week recorded the largest weekly drop since early December. The 10-year yield ended 2014 at 2.173%.

The price of Nymex-traded West Texas Intermediate crude oil for February delivery(CLG5) skidded 3.3% to $46.56 after Goldman Sachs slashed its year-end crude-oil price forecasts.

The bank's energy analysts revised down their three-month forecast for WTI crude to $41 a barrel from a previous estimate of $70. They see WTI at $39 a barrel in six months and $65 a barrel in a year, versus previous price forecasts of $75 and $80, respectively.

Also read: Oil's slump could upend $2 trillion in investments, Goldman Sachs says

The five-year yield (5_YEAR) was down 2.8 basis points to 1.414%. The two-year yield (2_YEAR) was down two basis points to 0.557%, while the 30-year yield (30_YEAR) was down 1.8 basis points to 2.537%.

Here's what bond investors were watching Monday:

In Europe, Greek bond yields plummeted by more than 57 basis points to 9.603% after Greek Prime Minister Antonis Samaras said he would ease unpopular austerity measures ahead of Greece's Jan. 25 general election next week.

The move is widely seen by analysts as an effort to shore up support for his party going into the election. Recent polls show that the anti-austerity Syriza Party is leading in election polls.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires