Treasury 10-year notes erased gains even as growth ebbed in Japan and before a report that analysts said will show Europe’s economy shrank in the second quarter.

Mohamed El-Erian, chief executive officer at Pacific Investment Management Co., which runs the world’s biggest bond fund, said the odds of a worldwide recession are about one- third. The euro-area economy contracted 0.2 percent from the first quarter, according to the median estimate of 35 economists in a Bloomberg survey before tomorrow’s report.

Benchmark 10-year yields were little changed at 1.66 percent at 7:25 a.m. New York time after earlier falling to 1.63 percent, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due August 2022 was 99 23/32.

To contact the reporter on this story: Neal Armstrong in London at narmstrong8@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

 

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