February 10, 2017 / 7:58 PM / 6 months ago

TREASURIES-Yields edge up on import data, but set for weekly decline

* Yields retrace gains after consumer confidence reading
    * Yields down for the week after subdued session

 (Updates to afternoon U.S. trading, adds analyst quote)
    By Dion Rabouin
    NEW YORK, Feb 10 (Reuters) - U.S. Treasury yields edged
higher on Friday, boosted by solid monthly import price data as
investors acted largely on technical data.
    A meeting between U.S. President Donald Trump and Japanese
Prime Minister Shinzo Abe yielded little in the way of
headlines.
    Technical positioning in limited trading volume shifted
markets through the day as a weak reading on U.S. consumer
confidence forced traders to re-examine the market's momentum.
    "For whatever reason, today you could basically see the
tumbleweeds rolling through many markets," said Guy LeBas, chief
fixed income strategist at Janney Montgomery Scott LLC in
Philadelphia. "It's quiet out there."
    Yields hit session highs after the release of the
higher-than-expected reading on U.S. monthly import prices,
which signaled that inflation could be moving higher. Yields
retraced some of the gains after the University of Michigan's
reading of consumer confidence for February came in below
expectations. 
    Benchmark 10-year Treasury note yields rose to a
session high of 2.43 percent after the release of the imports
data, which showed prices increased 0.4 percent in January after
an upwardly revised 0.5 percent rise in December.
    The 10-year note was last down 3/32 in price to yield 2.41
percent.
    Yields broadly rose and fell in a fairly tight range through
the day. Analysts said the moves were based mostly on technical
factors, as yields have approached 50- and 200-day moving
average metrics and psychologically important support and
resistance levels.
    "Conviction levels in general are extremely low," said
Gennadiy Goldberg, interest rates strategist at TD Securities.
"No one has a good sense of what the next step is. We're all
really just waiting for the next headline, which makes this a
very tough investment climate because you're forced to move
tactically."
    Yields were on track move marginally lower for the week
after earlier malaise about the lack of specifics in Trump's tax
plan and uncertainty over looming elections in Europe drove
buying of safe-haven U.S. government debt.
    The 5-year note yield fell to its lowest level
since December, and longer-dated yields hit multi-week lows on
Wednesday.
    Trump's comments on Thursday that his administration was set
to release a "phenomenal" statement regarding his tax plan in
the next few weeks pushed a selloff in Treasuries that halted
the week's earlier trend toward lower yields.

 (Reporting by Dion Rabouin; Editing by David Gregorio and
Leslie Adler)

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