* Prices rise, retail sales below expectations
* Fed to buy $850 mln-$1.1 bln bonds due 2036-2044
* Market looks to inflation data due on Wed, Thurs
By Karen Brettell
NEW YORK, May 13 U.S. Treasuries yields fell on
Tuesday after U.S. retail sales for April came in below
economists' expectations, which could temper hopes of a sharp
acceleration in economic growth in the second quarter.
U.S. retail sales barely rose in April and a gauge of
consumer spending slipped, held back by declines in receipts at
furniture, electronic and appliance stores, restaurants and bars
and online retailers.
The Commerce Department said on Tuesday retail sales edged
up 0.1 percent last month, less than economists forecasts of 0.4
percent, though the figure for March was revised upward to 1.5
While the market was disappointed, "the number is not as bad
as the headline," said Charles Comiskey, head of Treasuries
trading at Bank of Nova Scotia in New York, noting the rise from
March's 1.5 percent growth figure showed still-solid growth.
Benchmark 10-year Treasuries have held in a tight range
since January, with yields oscillating between 2.57 percent and
2.82 percent as investors analyze data for signs of when the
Federal Reserve is likely to begin raising rates, which many
expect next year.
Ten-year notes were last up 10/32 in price to
yield 2.63 percent, down from 2.66 percent late on Monday.
Thirty-year bonds gained 24/32 in price to yield
3.46 percent, down from 3.49 percent.
Recent data, including the jobs report for April have shown
accelerating growth and increased investor hopes that weakness
from earlier in the year, which many blame on bad weather, is
The next focus of attention will be the U.S. Producer Price
Index for April on Wednesday and the Consumer Price Index for
April on Thursday, which will be analyzed for signs that price
pressures are increasing.
Low inflation is seen as complicating the Fed's ability to
raise interest rates unless there are signs that inflation will
rise back to the Fed's 2 percent target.
The Fed will buy between $0.85 billion and $1.10 billion in
bonds due between 2036 and 2044 on Tuesday as part of its
ongoing purchase program.
(Editing by Bernadette Baum)