`US Treasury debt prices barely budged on Monday as a dearth of new economic data left investors with little to gamble on. Trading was choppy and volume was light, with bonds erasing early losses after the stock market shed some gains. Benchmark 10-year notes were off just 1/32 and yielding 4.22 percent, near the middle of their recent range.
Wall Street was also keeping an eye on oil prices, which were once again headed back toward record peaks hit last week.
"Rising oil prices are beginning to have a negative impact on the business results of retail chains," said Toshiyuki Suzuki, senior economist at UFJ Bank.
He was referring in particular to Wal-Mart Stores, which last week warned third quarter profits might suffer under the burden of high oil prices.
Whether the rest of the US economy would be hurt as well would be difficult to gauge during this thin week for economic data releases, leaving bond analysts to focus on a speech from Federal Reserve Chairman Alan Greenspan due on Friday.
However, the topic of "Reflections on Central Banking" might not be that conducive to any market insights on Fed thinking.
More important to investors might be a pronouncement from Michael Moskow, president of the Chicago Fed, who will be talking directly about the economy.
"We are beginning to see signs that monetary tightening combined with soaring oil prices are beginning to curb demand, and rate hikes are likely to continue," said Suzuki. "If this brake proves to be insufficient, the Fed will invariably step up its rate hike pace."
Central bank musings aside, the market will gear up to absorb the latest bout of supply. The Treasury Department said on Monday it planned to sell $20 billion at its two-year note auction on Wednesday - the same amount as at its last two sales of the same maturity.
Two-year Treasuries were flat, yielding 4.02 percent. Five-year notes were up 1/32 and yielding 4.08 percent, but the 30-year bond was off 4/32 to yield 4.43 percent, up from 4.42 percent on Friday.
The bond market's rangebound state is due largely to expectations of steady interest rate increases from the Federal Reserve, which recent data have failed to alter.
Economists foresee at least two more interest rate hikes this year, which would bring the fed funds rate to 4.00 percent. Some are betting the central bank will not pause, lifting the rate to 4.25 percent and perhaps beyond.
The Fed has raised rates 10 times since June 2004, taking the benchmark fed funds rate to its current 3.50 percent.
Analysts doubt that even Greenspan's speech would drastically alter the interest rate outlook, barring some unlikely surprise from the chairman.