By Daniel Kruger 

U.S. government bond prices rose Tuesday as investors are becoming increasingly concerned about signs of a slowdown in global economic growth.

The yield on the benchmark 10-year Treasury note fell to 2.638%, according to Tradeweb, down from 2.666% Friday.

Yields, which fall when prices climb, declined as investors focused on signs of slowing growth in Europe and Asia. Sentiment about current conditions in Germany fell in January, the ZEW Institute said Tuesday. Economists at Deutsche Bank now forecast Germany's economic growth at just 0.5% this year. If that prediction comes true, it would be the country's weakest expansion rate since 2013.

In China, where growth and consumer sentiment has eroded amid a bruising trade dispute with the U.S., auto sales declined again last month, with passenger-vehicle deals off 18% from a year earlier, China's Association of Automobile Manufacturers said Monday.

The rise in demand for safe assets such as U.S. Treasury debt shows "there's a full recognition of how bad the global economy is right now," said Andrew Brenner, head of global fixed-income at NatAlliance Securities.

Investors have begun to expect the Federal Reserve's next move on interest-rates -- from its current range of 2.25% to 2.5% -- will be to lower them rather than raise them, Mr. Brenner said.

Fed funds futures, which investors use to bet on the path of central-bank rate policy, shows the probability of a rate increase by year-end is 3% versus 11% odds for a rate cut, according to CME Group data early Tuesday. One month ago, the likelihood of a rate increase in 2019 was 31% compared with 3% for a reduction.

Write to Daniel Kruger at Daniel.Kruger@wsj.com

(END) Dow Jones Newswires

February 19, 2019 12:30 ET (17:30 GMT)

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