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TREASURIES-U.S. bond yields little changed despite Ukraine tensions
April 21, 2014 / 3:15 PM / 4 years ago

TREASURIES-U.S. bond yields little changed despite Ukraine tensions

* Traders anticipate upbeat U.S. data

* Traders discount separatist conflict in Ukraine

* Market awaits $96 bln in Treasury supply

By Sam Forgione

NEW YORK, April 21 (Reuters) - U.S. Treasuries yields were little changed on Monday after traders digested recent strong economic data and focused on last week’s efforts to settle unrest in Ukraine.

While conflict in Ukraine lingered on Monday, traders concentrated on last Thursday’s upbeat U.S. economic data showing jobless claims remained low and factory activity was better than expected, and a significant international agreement to lower tension in Ukraine.

“Finally, we’re at a point where it looks like the surprises are to the upside,” said Aaron Kohli, an interest rate strategist at BNP Paribas in New York, about the recent U.S. economic data.

Traders anticipated figures this week on U.S. durable goods orders, new and existing home sales, weekly jobless claims and consumer sentiment could come in positive, which would support the view that U.S. economic activity has improved after a brutally cold winter.

Those expectations limited safe-haven bids for U.S. Treasuries. Traders also discounted signs of continued strain in Ukraine and focused on a joint statement from Russia, Ukraine, the European Union and the United States last Thursday to ease tensions in the region.

On Monday, Pro-Moscow separatist gunmen showed no sign of surrendering government buildings they have seized. Washington says it will hold Moscow responsible and impose new economic sanctions if the separatists do not clear out of government buildings they have occupied across swathes of eastern Ukraine over the past two weeks.

The Russian government’s stance and joint efforts to ease tensions last week in Ukraine have had a greater impact on trading than the continued separatist conflict on Monday, said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia.

Traders also awaited $96 billion in new coupon-bearing supply this week. The U.S. government will sell $32 billion in two-year notes on Tuesday, $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.

Benchmark 10-year notes were last up 3/32 in price to yield 2.7 percent, from 2.71 percent late Thursday. The yield on the 30-year Treasury bond was last at 3.49 percent, down slightly from 3.51 percent late Thursday. (Reporting by Sam Forgione; Editing by Meredith Mazzilli)

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