* Chinese inflation data pushes yields higher
* 30-year yields hit 4-month high after U.S. retail sales,
* Selloff slowed by weak consumer sentiment data
By Dion Rabouin
NEW YORK, Oct 14 U.S. Treasury yields rose
across the board on Friday with 30-year bond yields hitting a
four-month high as a rebound in Chinese inflation data eased
concerns about sluggish growth from the world's second largest
economy amid solid U.S. retail sales and inflation data.
China's inflation rose more than expected in September for
both consumers and producers, with producer prices gaining for
the first time since January 2012.
The strong selling in Treasuries that followed was an
"overreaction" in anticipation of the retail sales data and an
upcoming speech from Federal Reserve Chair Janet Yellen, said
Lou Brien, market strategist at DRW Trading in Chicago.
"China giveth and China taketh away," Brien said. "This
being the Halloween season, the markets are almost looking for
something to spook them and the last couple of days it's been
China that first spooked them higher and then spooked them
Weak Chinese export data was seen as the catalyst on
Thursday that sparked buying in Treasuries after two straight
days of selling.
Friday's selloff initially paused after the release of the
retail sales and producer price data, which largely matched the
expectations of economists, but renewed the push lower as
investors unpacked the retail sales numbers that showed strength
in autos, gasoline, furniture and restaurants.
A reading on U.S. consumer sentiment that was the lowest
since September 2015 pulled the market back from the day's price
The drop in consumer sentiment was disappointing and
"suggested the toxicity of the presidential election is probably
weighing on consumer attitudes," said Tom Simons, money market
economist at Jefferies & Co. in New York.
The University of Michigan, which sponsors the consumer
sentiment survey, blamed the drop in September's reading from a
strong number in August on "uncertainty" surrounding the Nov. 8
Benchmark 10-year Treasury notes were last down
8/32 in price to yield 1.766 percent.
The 30-year bond was the main target of investor
selling on Friday, with prices falling by more than 1 point in
early trading and yields hitting their highest since June 23.
The long bond was last down 28/32 in price to yield 2.519
That steepened the yield curve, and the yield spread between
5- and 30-year Treasuries rose to more than 125
basis points, its highest since Sept. 21.
(Reporting by Dion Rabouin; Editing by Chris Reese)