NEW YORK: US Treasuries yields fell on Monday on doubts over the strength of a ceasefire between Ukraine and pro-Russian separatists and renewed concerns over U.S. economic growth following last week's disappointing jobs report.
The ceasefire, which took effect on Friday evening, was largely holding on Monday in eastern Ukraine, but comments from Ukrainian President Petro Poroshenko vowing to defend the eastern port of Mariupol kindled traders' skepticism.
"This misplaced enthusiasm that we're out of the woods now leads me to believe we're set for more disappointment," said Robbert van Batenburg, director of market strategy at Newedge USA LLC in New York.
He said Poroshenko's comments on Monday that he secure the defense of Mariupol with rocket-launchers, tanks, and air cover renewed doubts and drove bids for safe-haven Treasuries.
Traders also digested last Friday's weaker-than-expected U.S. employment report from the Labor Department showing nonfarm payrolls increased 142,000 last month, well below expectations of a rise of 225,000, according to a Reuters poll.
Analysts re-evaluated a view the report would have little impact on U.S. monetary policy, saying it could lead the Federal Reserve to take a more dovish stance on raising interest rates if more U.S. economic data comes in weak.
"If the Fed see multiple prints of weakness in some key figures like retail sales and employers failing to hire, then it does become more significant," said Justin Hoogendoorn, fixed income strategist at BMO Capital Markets in Chicago.
He said U.S. retail sales figures for August, due on Friday, would be critical and that a weaker-than-expected reading could snowball with the jobs report and affect the Fed's views on monetary policy.
Economists expect retail sales to have risen 0.6 percent, according to a Reuters poll, up from a flat reading in July.
Benchmark 10-year U.S. Treasury notes were last up 10/32 in price to yield 2.42 percent, from a yield of 2.46 percent last Friday. U.S. 30-year Treasury bonds were last up a full point in price to yield 3.18 percent, from a yield of 3.24 percent last Friday.
On Wall Street, U.S. stocks were slightly lower. The benchmark S&P 500 was last down 0.3 percent.
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