TREASURIES-Prices lifted by limp euro economic data

Mon Jun 23, 2014 9:47am EDT

Related Topics

* Euro weakness seen hurting global growth
    * Price gains best in long maturities

 (Adds details, updates trading)
    By Michael Connor
    NEW YORK, June 23 (Reuters) - Prices of U.S. Treasuries rose
on Monday after business activity data showed growth slowing in
France and elsewhere in the euro zone.
    "Prices are up here mainly because some of the data we got
overnight and over the weekend were somewhat on the
disappointing side, most notably France," said Stan Shipley,
fixed income strategist at ISI Group in New York.
    The euro zone's flash composite purchasing managers' index
fell to 52.8 in June, below forecast, from 53.5 in May, data
provider Markit said.
    Germany, Europe's largest economy, was the driving force in
the composite index, although its PMI eased to 54.2 from 55.6.
The French index slumped to 48.0 from 49.3, its lowest reading
since February. 
    "If Europe cannot post acceptable GDP growth, then it's
unlikely that China and other parts of the world can be solid
too," Shipley said. "Then the U.S. looks more attractive."
    Earlier, during the Asian trading day, reports showed
manufacturing in China and Japan returning to growth in June
after months of decline.      
    Price gains were largest in longer-dated Treasuries, with
the benchmark 10-year notes up 7/32 to yield 2.595
percent, versus 2.612 percent late on Friday. 
    The 10-year notes yielded 3 percent at the beginning of the
year and appear to be returning to the 2.60 percent range that
has been in place for months, according to Shipley.
     Prices of 30-year Treasuries were up 18/32 to
yield 3.42 percent, down from Friday's New York close of 3.44
percent.
    Looking ahead, Treasury investors will be focused this week
on a number of indicators that cover housing, manufacturing,
durable goods, consumer confidence and gross domestic product.
    The Treasury is also due to sell $94 billion in new debt,
including $30 billion in two-year notes on Tuesday, $35 billion
in five-year notes on Wednesday and $29 billion in seven-year
notes on Thursday.

 (Editing by Bernadette Baum)
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