NEW YORK, July 17 (Reuters) - U.S. Treasury yields were little changed to slightly higher on Monday, trading in narrow ranges, after a fairly volatile week highlighted by soft U.S. inflation and retail sales data, with investors unsure about the market’s direction.
“We’re still trading off the weak inflation and retail sales data from Friday, although the market is trying to figure what to do next,” said Gennadiy Goldberg, interest rates strategist, at TD Securities in New York.
“I‘m not quite sure whether the sell-off in Treasuries is over. Unfortunately, there is not enough this week to offer any form of signal for the market,” he added.
Yields, which move inversely to prices, tumbled to multi-week lows Friday as a round of weak U.S. data dimmed expectations for an interest rate hike in December.
FTN Financial’s chief economist Chris Low in a recent research note pointed out that Friday’s poor data argued strongly for a pause in Federal Reserve rate hikes, and the Fed was due to hold anyway as it begins reducing its massive balance sheet.
“There are five months of data before the December meeting, plenty of time to reveal whether a six-month wait is long enough,” Low said.
The market was also focused on this week’s heavy calendar of U.S. corporate bond issuance, especially after the end of the earnings reporting season, analysts said, with corporates keen to lock in Treasury rates.
Action Economics said many financials will exit their blackout periods and are expected to lead corporate bond issuance. Those expected to issue bonds include JP Morgan Chase, Wells Fargo, and Jefferies Finance, the research firm said.
“There is a little bit of rate-locking going on and that pushes prices lower a little bit,” TD’s Goldberg said.
Treasuries tend to sell off when corporates enter into rate-lock agreements.
In late morning trading, U.S. 10-year yields rose to 2.328 percent, from 2.319 percent late on Friday.
U.S. 30-year bonds were down 1/32 in price, yielding 2.913 percent, from 2.910 percent Friday.
U.S. two-year yields were up at 1.363 percent, from Friday’s 1.356 percent.
The weaker-than-expected New York State manufacturing index fell in July to 9.8, compared with a forecast of 15, had little impact, but it did keep yields near their lows for the day. (Editing by Bernadette Baum)