TREASURIES-Prices slip, Fed meeting this month in focus

Fri Jan 17, 2014 10:14am EST

Related Topics

* Treasuries rangebound as data meets expectations
    * Tapering in focus for Fed January meeting
    * Fed to buy $2.25 bln - $3 bln notes due 2021-2023

    By Karen Brettell
    NEW YORK, Jan 17 (Reuters) - U.S. Treasuries prices slipped
on Friday as housing and industrial production data came in
largely as expected and as trading volumes were light before a
long holiday weekend.
    The bonds have held in a relatively tight range this week,
after a weaker than expected employment report last Friday led
benchmark 10-year yields to fall from the near the 3 percent
level to a range between 2.82 percent and 2.92 percent.
    Market participants are now focused on whether that report
is likely to lead the Federal Reserve to hold its monthly bond
purchase program at current levels when it meets later this
month, or continue to reduce the size of purchases.
    "There is still some feeling that they may pause if the
economic data looks somewhat weaker, that sentiment surfaced
after the employment report but since then we've seen better
economic numbers and the beige book released this week was quite
upbeat," said Jim Kochan, chief fixed income strategist at Wells
Fargo Funds Management in Menomonee Falls, Wisconsin.
    The U.S. economy continued to grow at a moderate pace from
late November through the end of 2013, with some regions of the
country expecting a pick-up in growth, the Fed said on Wednesday
in its Beige Book report of anecdotal information on business
activity collected from contacts nationwide. 
    The Fed will buy $2.25 billion to $3 billion in notes due
2021 to 2023 on Friday as part of its ongoing purchase program.
    The U.S. central bank cut the size of its monthly bond
purchase program by $10 billion to $75 billion at its December
meeting.
    Benchmark 10-year notes were last down 2/32 in
price to yield 2.854 percent, up from 2.845 percent late on
Thursday.
    Bonds showed little reaction to data on Friday that U.S.
housing starts fell less than expected in December, and
industrial output rose by 0.3 percent in December, as expected.
 
    U.S. consumer sentiment also slipped in its first January
measure, weighed by lowered expectations among lower- and
middle-income families, a survey showed. 
    Fed Bank of Richmond President Jeffrey Lacker will speak
later on Friday.
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A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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