November 16, 2015 / 12:55 AM / 2 years ago

TREASURIES-Treasuries futures rise in wake of Paris attacks

NEW YORK, Nov 15 (Reuters) - Treasury futures prices rose on Sunday in the wake of deadly attacks last week in Paris, with analysts citing uncertainty as a catalyst for a risk-off trade.

Treasuries prices had risen Friday, with yields hitting their lowest in a week, as unexpectedly weak U.S. retail sales and producer prices data reinforced the view of modest economic growth and tame inflation.

Analysts expected yields to fall further on Monday in a rush to safety assets following the Paris attacks, but the possibility of moves in both directions was latent.

“I am not sure we get a true flight to quality move, historically the public has stepped up in a positive way when confronted with terrorism,” said Michael O‘Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

“Should such a move occur, U.S. Treasuries and the U.S. dollar are the quality assets investors will flee to.”

The 10-year Treasury futures contract rose 13/32 in price to 126-30/32 at 7:34 p.m. EST (0034 GMT, Monday) to hit its highest since Nov. 6.

Short positions in 10-year Treasury futures have risen sharply of late, as traders anticipate the Federal Reserve will raise interest rates before the year ends for the first time in nearly a decade.

The spike in Treasuries futures could trigger increased volatility if there is a rush to cover those short bets. (Reporting by Rodrigo Campos; Editing by Nick Zieminski)

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