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CORRECTED-TREASURIES-Yields rise after strong U.S. import data, but set for weekly decline
February 10, 2017 / 4:11 PM / 10 months ago

CORRECTED-TREASURIES-Yields rise after strong U.S. import data, but set for weekly decline

(Corrects first and second paragraphs to show that Abe is prime
minister of Japan, not president)
    * Yields hit highs after import data
    * Yields retrace gains after consumer confidence reading
    * Investors look to Trump-Abe meeting for next trading
headline

    By Dion Rabouin
    NEW YORK, Feb 10 (Reuters) - U.S. Treasury yields rose on
Friday, boosted by solid U.S. monthly import price data as
investors awaited headlines from a meeting between U.S.
President Donald Trump and Japanese Prime Minister Shinzo Abe.
    The two leaders were set to discuss trade and investment and
it was expected that any public statement from the meeting would
focus on those issues rather than the relative strength of the
dollar against the Japanese yen. 
    Technical positioning was also a catalyst for trades as
offsetting data on consumer confidence forced traders to
re-examine the market's momentum.
    Yields hit session highs after the release of the
higher-than-expected reading on U.S. monthly import prices that
signaled inflation could be moving higher. However, they
retraced some of the move after the University of Michigan's
reading of consumer confidence for February came in below
expectations. 
    Benchmark 10-year Treasury note yields rose to a
session high of 2.43 percent after the release of the imports
data, which showed prices increased 0.4 percent in January after
an upwardly revised 0.5 percent rise in December.
    The 10-year note was last down 7/32 in price to yield 2.42
percent.
    Analysts said the markets were largely trading on technical
factors, as yields have approached 50- and 200-day moving
average metrics and psychologically important support and
resisitance levels.
    "Conviction levels in general are extremely low," said
Gennadiy Goldberg, interest rates strategist at TD Securities.
"No one has a good sense of what the next step is. We're all
really just waiting for the next headline, which makes this a
very tough investment climate because you're forced to move
tactically."
    Yields are set to move marginally lower for the week after
earlier malaise about the lack of specifics in Trump's tax plan
and uncertainty over looming elections in Europe drove more
buying of safe-haven U.S. government debt.
    The 5-year note yield fell to its lowest since
December and longer-dated yields hit multi-week lows on
Wednesday.
    Trump's comments on Thursday that his administration was set
to release a "phenomenal" statement regarding his tax plan in
the next few weeks pushed a selloff in Treasuries that halted
the week's earlier trend toward lower yields.

 (Reporting by Dion Rabouin; Editing by David Gregorio)

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