TREASURIES-Prices fall after short covering, retail sales strong

Tue Jan 14, 2014 9:12am EST

Related Topics

* Prices dip, retail sales data points to stronger economy
    * Two-day rally pauses after short-covering
    * Fed to buy $1 bln-$1.5 bln bonds due 2036-2043

    By Karen Brettell
    NEW YORK, Jan 14 (Reuters) - U.S. Treasuries prices remained
lower on Tuesday, after a gauge of U.S. consumer spending rose
more than expected in December, suggesting the economy gathered
steam at the end of last year and was poised for stronger growth
in 2014.
    The Commerce Department said on Tuesday retail sales,
excluding automobiles, gasoline, building materials and food
services, increased 0.7 percent last month after a 0.2 percent
rise in November. 
    The data follows a report Friday that showed a
weaker-than-expected jobs gain for December, which sent yields
lower as some investors reevaluated bullish expectations for
economic growth this year.
    Treasuries held at higher yields on Tuesday after the retail
sales data, pausing a two-day rally as traders also covered
short positions set before the employment report.
    "The data's better than expected, even though you had
downward revisions in the last month," said Charles Comiskey,
head of Treasuries trading at Bank of Nova Scotia in New York.
    Prices retreated as the rally following the jobs number
resulted in "those shorts being taken out," he said.
    Benchmark 10-year notes were last down 4/32 in
price to yield 2.850 percent, up from 2.825 percent late Monday.
They have fallen from a high of 2.967 percent on Friday before
the jobs data was released.
    Thirty-year bonds fell 7/32 in price to yield
3.793 percent, up from 3.766 percent.
    The Fed will buy between $1 billion and $1.50 billion in
bonds due between 2036 and 2043 on Tuesday as part of its
ongoing purchase program.
    Philadelphia Fed President Charles Plosser and Dallas Fed
President Richard Fisher are both due to speak later on Tuesday.
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