February 13, 2017 / 2:15 PM / 5 months ago

TREASURIES-Yields rise as traders await Yellen testimony

3 Min Read

* Yellen testifies to lawmakers on Tuesday and Wednesday
    * Economic data this week includes inflation, retail sales
    * Weaker yen seen adding to pressure on bonds

    By Karen Brettell
    NEW YORK, Feb 13 (Reuters) - U.S. Treasury yields rose on
Monday as investors looked ahead to testimony by Federal Reserve
Chair Janet Yellen on Tuesday and Wednesday and waited on a busy
week of economic data.
    Investors will be watching for any new indications of when
the U.S. central bank will next raise rates when Yellen gives
her semiannual Humphrey Hawkins testimony before lawmakers in
Washington.
    Investors reduced expectations of rate hike at the Fed's
March meeting after jobs data for January showed disappointing
wage growth.
    However, "if she says something hawkish, there's definitely
a reason to believe they could go in March," said Justin
Lederer, an interest rate strategist at Cantor Fitzgerald in New
York.
    Benchmark 10-year notes were last down 9/32 in
price to yield 2.44 percent, up from 2.41 percent late on
Friday.
    Futures traders are currently pricing in an 18-percent
likelihood of a March rate hike, according to the CME Group's
FedWatch Tool.
    Fed Vice Chair Stanley Fischer said on Saturday that there
was significant uncertainty about U.S. fiscal policy under the
Trump administration, but the Fed would be strict in meeting
targets of creating full employment and getting inflation to 2
percent. 
    A weaker yen was also seen as putting pressure on bonds on
Monday.
    The yen weakened to a two-week low against the U.S. dollar
after a two-day U.S.-Japan summit held over the weekend
apparently ended smoothly without President Donald Trump talking
tough on trade, currency or security issues. 
    Rising stock markets also reduced demand for the yen and
U.S. bonds, which are typically seen as safe-haven assets.
    "The yen is probably putting a little pressure on the
market," said Lederer, "it's been a highly correlated trade over
the last few weeks."
    Economic releases including inflation, manufacturing and
retail sales data are also in focus this week.

 (Editing by Nick Zieminski)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below