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TREASURIES-U.S. bond prices up, Dec. Fed rate hike still seen likely
November 16, 2015 / 4:07 PM / 2 years ago

TREASURIES-U.S. bond prices up, Dec. Fed rate hike still seen likely

* NY Fed manufacturing data negative for 4th straight month

* 10-year notes briefly rise after NY Fed data

* Paris attacks unlikely to keep Fed from Dec. rate increase

By Tariro Mzezewa

Nov 16 (Reuters) - U.S. Treasuries prices rose modestly on Monday on concerns over Friday’s attacks in Paris, though the gains were pared as investors calculated that the U.S. Federal Reserve was still on track to raise interest rates in December.

Treasury futures prices had risen on Sunday in the wake of the deadly attacks, with analysts citing uncertainty as a catalyst for a risk-off trade.

“The scope of the attacks has become clearer and uncertainty has abated for the time being, but part of it undoubtedly has to do with the calculation that this is still unlikely to move the Fed from a December hike,” wrote Aaron Kohli, interest rates strategist at BMO Capital Markets in New York.

The yield on benchmark 10-year Treasury notes briefly fell 2 basis points after the New York Fed’s Empire State Manufacturing Survey was negative for the fourth consecutive month, momentarily driving investors into safer government debt.

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

While Friday’s data dialed down some expectations of a December rate hike, a number of Fed officials, including Cleveland Fed President Loretta Mester, signaled that a rate increase is still likely, barring a sharp deterioration in the economy and financial markets.

Ten-year Treasuries were up 4/32 in price to yield 2.268 percent, down from 2.28 percent late on Friday.

U.S. stocks rose slightly, with investors seeing little long-term economic impact from the attacks.

Analysts and investors are looking to Tuesday’s U.S. consumer price data from the Labor Department and minutes from the Federal Reserve’s October meeting for clues about the likelihood of a December interest rate increase.

Reporting by Tariro Mzezewa; Editing by Dan Grebler

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