US Treasury yields flirt with the negative Yields on one-month US Treasury bills threatened to turn negative Monday, as investors looked for safe places to park short-term cash. Strategists likened the move to insurance, in case the recent positive developments in talks over the fiscal cliff of automatic spending cuts and tax increases turned out to be a mirage. Additional technical factors also appeared to be playing a role, as investors positioned themselves for an influx of new money into the market from Federal Reserve quantitative easing and the likely expiration of a government guarantee on bank accounts. Tradeweb, the trading platform, showed the offer price on the one-month T-bill at a negative 0.005 per cent yield, though it was not immediately clear if investors would accept a negative return. Yields last slipped below zero in January. Alex Roever, strategist at JPMorgan, said he expected buying pressure to continue in short-term bills, keeping yields at low levels. "There are several contributing factors," he said. One is the cash impact of quantitative easing, which is going to bring substantially more cash in to the market. This is combined with the parking of cash around the financial year-end and with the fiscal cliff still unresolved there is a lot of money that does not want to be exposed to risk. A lot of people want to stand on the sidelines until there is greater clarity. Traders also believe it is increasingly unlikely that Congress will agree an extension of an unlimited government guarantee on non-interest bearing bank accounts that has been in place since the financial crisis and is due to expire on December 31. A bill that would have extended the guarantee failed to pass a procedural hurdle in the Senate last week. Some $1.5tn is parked in guaranteed bank accounts, and strategists believe at least some of that money will be moved so that account holders are not exposed to the risk of their bank failing. Alternative homes for the money include short-term Treasury bills or money market funds that invest in government securities - both options that could push short-term T-bill rates lower. The downward pressure on T-bill yields was in contrast to moves elsewhere in the Treasury market, where the signs of progress in fiscal cliff talks suggested the US may avoid a potentially recession-inducing combination of tax rises and spending cuts. New data showed that foreign investors in long-term Treasuries returned to the market in October, buying a net $15.8bn, compared with sales of $17.3bn the previous month. China's holdings of US government debt rose $7.9bn to $1.16tn. Japan, which has threatened in recent months to overtake China as the biggest holder, upped its holdings by $5.2bn to $1.13tn.