Yields rise before data, Treasury refunding plans

NEW YORK: US Treasury yields rose on Monday before a heavy week of data, which will culminate in Friday's employment r
31 Jul, 2017


Manufacturing reports on Monday and Tuesday and services and non-manufacturing data on Thursday will be watched for further indications of the strength of the US economy, with the main economic focus Friday's payrolls number.

The Treasury Department's quarterly refunding announcement on Wednesday will also be scrutinized for any indication of how

 the government plans to make up for a reduction in Federal Reserve bond purchases, when the US central bank begins paring them.

"The market is setting up for a lot of risk events later in the week," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.

Benchmark 10-year notes were last down 4/32 in price to yield 2.30 percent, up from 2.29 percent on Friday.

Absent a large shock, the data is seen as unlikely to sway the Federal Reserve from its likely path reducing its balance sheet in the coming months, even as inflation remains stubbornly low.

The Fed said on Wednesday it expected to start winding down its massive holdings of bonds "relatively soon."

Many analysts and traders expect the Fed to announce its balance sheet reduction plans at its September meeting.

Month-end demand for Treasuries may help bond prices firm later on Monday.

 "I think the expectation is that rates move lower later in the day as we get month-end extensions," said Goldberg.

Copyright Reuters, 2017
 

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