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TREASURIES-Yields on 30-year bond hit 6-day high after strong U.S. data
December 27, 2016 / 3:52 PM / a year ago

TREASURIES-Yields on 30-year bond hit 6-day high after strong U.S. data

* U.S. 30-year yields rise to highest since Dec. 21
    * Treasury yields rise after strong Case-Shiller U.S. home
data
    * Yields remain near highs after strong consumer confidence
data

    By Dion Rabouin
    NEW YORK, Dec 27 (Reuters) - The 30-year Treasury bond rose
to its highest level in nearly a week with yields on Treasuries
holding maturities between five and 30 years all touching their
highest levels of the day after the release of solid readings on
the U.S housing market.
    Data from the S&P CoreLogic Case-Shiller composite index
showed U.S. metro area home prices increased modestly in
October, gaining slightly more than expected for the
month-on-month readings. The Case-Shiller index was the latest
in a number of solid reports on the U.S. economy showing
inflation may already be gaining steam. 
    "Home prices and the economy are both enjoying robust
numbers," said David M. Blitzer, managing director and chairman
of the index committee at S&P Dow Jones Indices.
    Benchmark 10-year Treasury notes fell 8/32 in
price to yield 2.576 percent with yields on the 30-year note
 rising to 3.151 percent, the highest since Dec. 21.
    Rising inflation lowers the value of already-held bonds with
Treasuries of longer-dated maturities generally being the most
sensitive.
    Low volume trading following the Christmas holiday that
closed markets on Monday and ahead of the New Year holiday this
weekend also exaggerated the move, analysts said.
    "The numbers were stronger than expected so that kind of
puts you in a direction, and the thinness in this market
probably puts you this far in that direction," said Lou Brien,
market strategist at DRW Trading in Chicago. "It doesn't take
much selling or buying to push it one way or another this week."
    The market produced a limited reaction to U.S. consumer
confidence data that rose to its highest level in 15 years this
month as expectations for strength in job growth, business
conditions and the stock market continued to build following the
U.S. presidential election. 
    "The earlier data didn't necessarily justify the bonds being
this much lower on the day, so there's probably not much more
justification for pushing the thing further even though the
consumer confidence number was strong," DRW's Brien said. 

 (Reporting by Dion Rabouin; Editing by Chizu Nomiyama)

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