| NEW YORK, July 17
NEW YORK, July 17 U.S. Treasuries rose on
Thursday after disappointing U.S. housing data showed the
slowest pace of groundbreaking in nearly a year, driving yields
lower and reinforcing a view that U.S. monetary policy will
remain loose well into 2015.
Investors bid up Treasury prices following the data,
extending earlier gains but not enough to break out of recently
tight trading ranges.
Housing starts for June fell 9.34 percent to a seasonally
adjusted annual 893,000 million unit-pace, the weakest pace of
activity since September. Economists polled by Reuters forecast
a rise to a 1.02 million-unit rate.
"We have a stark reminder that the rebound in the housing
market we have seen has stalled. This is a response of the
industry to slowing overall sales. The tight lending standards
have narrowed the pool of buyers," said Anthony Karydakis, chief
economic strategist at Miller Tabak in New York.
"The previous two years have been driven by investors who
have been buying all-cash. Now that pool of buyers has dried
up," Karydakis said.
The housing data stood in contrast to a report showing
improvement in the jobs market. The number of Americans filing
new claims for unemployment benefits unexpectedly fell last week
by 3,000 to a seasonally adjusted 302,000 for the week ended
July 12, according to the U.S. Labor Department.
"The four-week average is the lowest since the recovery.
This suggests to me that the payroll number will be pretty
again, roughly in the 200,000 area. We had a pretty good first
half in terms of job growth. We might be off to a pretty good
start to the second half," said David Berson, chief economist at
Nationwide in Columbus, Ohio.
Benchmark 10-year U.S. Treasury yields fell to 2.4940
percent soon after the data was released, matching a six week
low hit on July 10. Currently, the price on the 10-year note is
up 8/32 of a point, with the yield at 2.501 percent.
The 30-year Treasury bond climbed 18/32 of a
point in price to push the yield down to 3.31 percent, its
lowest since May 30.
Economists don't expect the U.S. central bank to start
raising interest rates before the second half of 2015. The Fed,
which is wrapping up its monthly bond buying program, has kept
overnight lending rates near zero since December 2008.
(Additional reporting by Richard Leong; Editing by Bernadette