NEW YORK: US Treasury yields fell on Wednesday after data showed that business investment spending plans fell for a sixth straight month in February, which could lead economists to further lower their first-quarter growth estimates.
The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 1.4 percent last month after a revised 0.1 percent dip in January.
"It was a very weak number," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. "It underscores the fact that you are getting a bit more of a slowdown in growth than people were expecting."
Treasuries have been increasingly sensitive to economic data since last week's Federal Reserve meeting, when the US central bank cut its inflation outlook and growth forecast and indicated that an interest rate hike June was not as baked in as many had previously expected.
A majority of Wall Street's top banks now see the Fed holding off until at least September before raising interest rates for the first time since 2006.
Benchmark 10-year notes were last up 2/32 in price to yield 1.87 percent, down from 1.88 percent late on Tuesday.
Reticence by many investors to take new positions with yields approaching two-year lows has also dampened trading volumes.
The next focus for the market are two debt auctions on Wednesday, beginning with the reopening of $13 billion in two-year floating rate notes.
The Treasury will also sell $35 billion in five-year notes on Wednesday, the second of three auctions this week of short- and intermediate-dated debt. The government sold $26 billion in two-year notes on Tuesday and will sell $29 billion in seven-year notes on Thursday.
Comments
Comments are closed.