TREASURIES-Prices rise as market awaits U.S. jobs data
* U.S. capital goods orders sank more than expected in September * October nonfarm payrolls due Friday, GDP due Thursday * U.S. Treasury quarterly refunding announcement due Wednesday By Ellen Freilich NEW YORK, Nov 4 (Reuters) - U.S. Treasury debt prices rose modestly on Monday, retracing some recent losses and hemming yields within recent ranges as investors looked ahead to key data later in the week as well as information on upcoming Treasury debt sales. Treasuries sank on Friday after a stronger-than-expected view of factory activity alleviated some concern about the negative impact on the economy of the partial shutdown of the federal government during the first half of October. A report on actual factory orders in September, released on Monday, was less upbeat, with the three-month annualized rate for orders of non-defense related capital goods, excluding aircraft, down 7.2 percent, from the second-quarter average. The weakness in those orders was interpreted as a sign companies cut their investment plans sharply as Washington hurtled toward the brink of default. While the orders data were essentially bond-friendly, the market looked toward this week's Treasury refunding announcement and the October U.S. payrolls report. "The market largely is just marking time ahead of the refunding announcement on Wednesday morning and the employment report on Friday," said John Canavan, fixed-income analyst at Stone & McCarthy Research Associates. The modest gains in prices merely reversed some of the ground lost last Thursday and Friday, he said. "The market had a little bounce as we settled into ranges today," he said. "The price action was not greatly affected by the factory orders release or anticipation of a weak payrolls report on Friday. It was more a matter of pushing paper around and waiting for another reason to move." U.S. third-quarter gross domestic product data are due on Thursday. Those figures will help show how strong momentum was in the economy before the October government shutdown, which was sparked by Republican efforts in Congress to undermine President Obama's signature healthcare law. And on Friday, the closely-watched October non-farm payrolls will be released. These key U.S. economic reports were delayed because of the shutdown and are among the most important data for weighing future Federal Reserve monetary policy. "There's a lot of short-term risk, depending on whether data surprises to the upside," said Robert Tipp, chief investment strategist at Prudential Fixed Income, in Newark, New Jersey. Fed policymakers want to see the unemployment rate dropping closer to 6.5 percent from the current 7.2 percent, but economists in a Reuters survey expect that rate to have edged up in October to 7.3 percent. The Fed recently kept in place its $85-billion-per-month of mortgage-backed securities and Treasuries purchases, although a statement from policymakers concluding a two-day meeting had a more hawkish tinge than some had expected. As a result, analysts broadly expect the Fed to begin tapering those asset purchases later than expected, perhaps well into 2014 rather than by the end of this year. Treasuries could remain rangebound in coming sessions, with investors reluctant to take on large positions until they have more certainty on the momentum in the economy. "This week, neutral data should lead to a 2.50 percent to 2.75 percent trading range on 10-year notes," said Chris Bury, head of U.S. rates trading and sales at Jefferies & Co. Prices for U.S. benchmark 10-year Treasury notes rose 7/32 in price on Monday to yield 2.60 percent, compared to a yield of 2.62 percent late on Friday. The U.S. 30-year bond rose 2/32 in price to yield 3.696 percent, versus 3.704 percent late on Friday. The U.S. Treasury on Wednesday will issue its quarterly refunding announcement, which will lay out funding needs for the next quarter and tell investors how much U.S. debt will be auctioned by the government. The Treasury will sell three-, 10- and 30-year securities next week and Treasury officials could also offer more information on its plans to sell floating rate notes in 2014. A special question the Treasury asked dealers who underwrite U.S. debt auctions concerned their views on the conduct of the Treasury's sales of five-year Treasury Inflation Protected Securities (TIPS), Canavan noted. "There's potential for some discussion in the Treasury's refunding announcement about that issue," Canavan said. The Federal Reserve on Monday bought $3.718 billion in Treasuries maturing August 2019 through June 2020 as part of its ongoing stimulus program.