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Bonds News

TREASURIES-Bonds gain as Trump comments, Brexit boost safety buying

* Trump protectionist fears boost bonds
    * Brexit concerns remain after May comments
    * Fed's Dudley: new Fed action unlikely near term

    By Karen Brettell
    NEW YORK, Jan 17 (Reuters) - U.S. Treasury prices gained on
Tuesday on concerns about protectionist trade policies by U.S.
President-elect Donald Trump, which hurt the U.S. dollar and
increased demand for U.S. bonds.
    In comments to the Wall Street Journal, Trump said a key
part of the House Republican's corporate-tax plan is "too
complicated." He also warned that the U.S. dollar is too strong,
saying that it makes it difficult for U.S. companies to compete
with China. 
    Renewed concerns over Britain's planned exit from the
European Union also boosted demand for U.S. safe haven debt.
    British Prime Minister Theresa May said on Tuesday that
Britain will leave the EU's single market when it exits the
European Union, putting an end to speculation that London might
try to seek a "soft Brexit". 
    "We're still in the midst of the weak dollar, lower yield
trade," said Jim Vogel, an interest rate strategist at FTN
Financial in Memphis. "It seems to represent a reversal from
last year, and renewed uncertainty about Brexit and U.S. fiscal
policy and the need to stay in Treasuries to diversify."
    Benchmark 10-year notes were last up 17/32 in
price to yield 2.32 percent, down from 2.38 percent late on
Friday. The yields earlier fell to 2.305 percent, the lowest
since November 30.
    The U.S. bond market was closed on Monday for the Martin
Luther King Day holiday.
    Bonds also gained after New York Federal Reserve President
William Dudley said that the U.S. central bank is unlikely to
take actions that would "snuff out" the current economic
expansion anytime soon because inflation is "simply not a
problem." 
    Consumer price index data on Wednesday will be next watched
for further indications about U.S. inflation.
    

 (Editing by Nick Zieminski)
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