LONDON (Reuters) - Treasuries were flat on Monday, trading within their recent narrow range as investors awaited signals on Spain’s progress towards a bailout.
A Spanish aid request could come next month, euro zone officials told Reuters. A summit of European leaders this week is not expected to shed new light on Madrid’s plans.
A rescue would activate the European Central Bank’s bond buying program and investors want to see how effective that tool could be in tempering the euro zone crisis.
Benchmark U.S. T-note yields rose 0.9 basis points on the day to 1.6647 percent, having traded in a 1.6-1.75 percent range this month. T-note futures were 1/32 lower at 133-09/32.
“We are rangebound and I don’t see any signs of that changing any time soon,” RIA Capital Markets strategist Nick Stamenkovic said. “The market was hoping that Spain might make a request for a bailout about the time of (the EU summit) but that seems unlikely so I think for now yields are stuck in a range of 1.60-1.75 percent.”
Stamenkovic said the investor focus on the euro zone meant that U.S. data releases this week, starting with September retail sales on Monday, were unlikely to take yields out of their recent range.
Traders also said investors may be reluctant to make big moves until after next month’s U.S. presidential and congressional elections.
Reporting by Marius Zaharia; Editing by John Stonestreet