NEW YORK: US Treasury yields were little changed on Monday in advance of a $26 billion sale of two-year notes, part of this week's $88 billion in longer-dated government debt supply.
Traders brushed off softer-than-forecast data on domestic consumer spending in February, which supports the view of sub-par economic growth in the first quarter and the likelihood the Federal Reserve will leave benchmark interest rates alone at least into mid-year.
The Commerce Department said on Monday that consumer spending, which represents more than two-thirds of the US economy, edged up 0.1 percent following a downwardly revised 0.1 percent gain in January. Consumer spending was previously reported to have increased 0.5 percent in January.
Trading volume was light with most European markets closed for Easter Monday. US financial markets reopened after being shut on Good Friday.
Analysts anticipated activity to pick up later this week as traders look for clues from Federal Reserve Chair Janet Yellen and other top policy-makers on the path of future interest rate increases.
They also see a bevy of domestic data culminating with the government's March payrolls report on Friday, which would shape investors' view on the US economic expansion in the first quarter.
On Friday, the government said its final reading on the gross domestic product in the fourth quarter of 2015 was a 1.4 percent annualized increase, faster than the 1.0 percent pace forecast among analysts polled by Reuters.
"A little something for everyone and likely enough data to continue the speculation on whether the Fed should tighten or not," said Kevin Giddis, head of fixed income capital markets at Raymond James in Memphis, Tennessee.
Federal funds futures suggested traders see a 10 percent chance the Fed would hike rates at its April 26-27 policy meeting, according to Reuters data. They imply traders anticipate a rate increase likely at the July policy meeting , CME Group's FedWatch program showed.
In early trading, benchmark 10-year Treasury notes were little changed in price from Thursday for a yield of 1.890 percent.
The yield on two-year notes was 0.865 percent, down 0.4 basis point from Thursday's close.
At 1 p.m. EDT (1700 GMT), the Treasury will $26 billion of two-year notes, followed by $34 billion of five-year notes on Tuesday and $28 billion of seven-year notes on Wednesday.
In the "when-issued" sector, traders see the latest two-year supply to sell at a yield of 0.879 percent versus 0.752 percent at the previous two-year auction in February.
Comments
Comments are closed for this article.