TREASURIES-Yields rise as stocks gain, retail sales data shows strength

Mon Apr 14, 2014 9:25am EDT

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* Yields rise from 1-1/2 -month lows as stocks stabilize
    * U.S. retail sales data points to stronger economy
    * Fed to buy $900 million to $1.15 billion bonds due
    * Inflation, manufacturing data in focus this week

    By Karen Brettell
    NEW YORK, April 14 (Reuters) - U.S. Treasuries yields rose
on Monday as stocks stabilized from a bruising selloff and
better-than-expected retail sales data boosted expectations that
growth is picking up after months of weakness blamed in part on
bad weather.
    Investors are focused on a busy week of data releases for
signs about the strength of the economy as the Federal Reserve
pares its bond purchases and looks towards interest rate hikes
that most expect to begin next year.
    Yields hit session highs on Monday after U.S. retail sales
recorded their largest gain in 1-1/2 years in March in the
latest sign the economy was emerging from its weather-induced
slumber and on track to accelerate in the second quarter.
    The data showed that growth is recovering from
weather-related weakness, said Ian Lyngen, an interest rate
strategist at CRT Capital in Greenwich, Connecticut. "It gave a
boost to stocks and weighed on Treasuries," he said.
    Benchmark 10-year notes were last down 5/32 in
price to yield 2.64 percent, after dropping to a 1-1/2-month low
of 2.60 percent in overnight trading.
    Treasuries yields had dropped on safety buying last week
after investors nervous over the valuations of some companies
fled stocks and sought out lower-risk investments. Overnight
buying sparked by tensions in Ukraine also helped bonds rally
before the U.S. session began.
    Ukraine's president threatened military action after
pro-Russian separatists occupying government buildings in the
east ignored an ultimatum to leave and another group of rebels
attacked a police headquarters in the region. 
    Safety buying of Treasuries ebbed on Monday in early U.S.
trading as stock futures firmed, with earnings from Citigroup
 helping sentiment after the bank said its quarterly net
profit rose on a smaller loss on its troubled assets. 
    Economic data releases including consumer price inflation
data on Tuesday and several manufacturing surveys will be in
focus for further signs of economic strength this week. Fed
Chair Janet Yellen is also due to speak on Tuesday at a markets
conference and on Wednesday at an economic event.
    The U.S. central bank will buy between $900 million and
$1.15 billion in bonds due between 2036 and 2044 on Monday as
part of its ongoing purchases.

 (Editing by James Dalgleish)
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