Treasuries rise, look to data for new impetus

LONDON (BestGrowthStock) – U.S. Treasury futures rose in Europe on Tuesday, recouping losses made on Friday as investors looked at a busy week of data releases to provide further impetus for another push higher.

At 0847 GMT (4:47 a.m. EDT), 10-year Treasury futures were 13/64 higher at 126-19/64. The benchmark 10-year note yielded 2.5072 percent, down 2.3 basis points on the day. Two-year yields were broadly flat at 0.505 percent.

“We’ve seen some strong buying from Asian real money and central banks and that’s led us back to the highs. We’ve just taken a pause… and now we’re going to focus on data,” a Treasuries trader said.

Home price, regional business activity and consumer confidence data are scheduled for release on Tuesday, with markets anticipating a continuation of recent gloomy signals about the health of the U.S. economy.

Also of interest will be the release of Federal Reserve minutes from the August policy meeting, which could provide some background on the central bank’s decision to reinvest money from maturing mortgage bonds into Treasuries.

“If anything, it might come across as a bit more hawkish than they have subsequently become, and that could wrongfoot the markets to an extent,” said Sean Maloney, rate strategist at Nomura in London.

Top-tier data releases later in the week include non-farm payrolls on Friday and Wednesday’s ADP employment report.

“Some of these lagging indicators are obviously going to drag behind the forward indicators we’ve seen, so it’s quite possible we see more downside, but whether that turns into a downside surprise is a different story, because a lot of that is factored in already,” Maloney added.

Month-end buying was also likely to be a factor in trading later in the session, having a flattening impact on the U.S. Treasury yield curve, analysts said. The U.S. 10-/30-year yield spread was last at around 105.5 bps, slightly tighter on the day.

(Editing by John Stonestreet)

Treasuries rise, look to data for new impetus