By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices reversed lower on Wednesday, pushing yields on most maturities up slightly, after the U.S. said orders for durable goods rose 4% in July, more than economists expected.
Yields on 10-year notes 10_YEAR +1.86% , which move inversely to prices, rose 1 basis point to 2.17%, after falling to 2.14% prior to the report. A basis point is 1/100th of a percentage point.
Thirty-year bond yields 30_YEAR +0.95% fell to 3.44% before the data, only to revert to little changed at 3.49% after its release.
Two-year yields 2_YEAR +9.48% were little changed at 0.22%.
Yields on 5-year 5_YEAR +1.46% and 7-year notes 7_YEAR +2.20% rose slightly ahead of sales during the session and Thursday.
Bonds gave up gains and U.S. stock futures pared most of their decline after the Commerce Department’s report, which also said orders for core capital goods, which omit the volatile defense and transportation sectors, still fell. Read story on durable-goods orders.
“Overall, a firm headline read, but ex-defense/air showed less robust growth,” Ian Lyngen, a bond strategist at CRT Capital Group, wrote in emailed comments. “Treasurys initially sold off in the wake of the data, but have firmed off the lows.”
Still to come is data on U.S. home prices and the Treasury Department’s auction of 5-year notes. Bids will be accepted until 1 p.m. Eastern time.
Bonds were up slightly before the U.S. data as disappointing data out of Germany weighed on global equities and triggered a small flight to quality into U.S. debt and German bunds.
But the main topic of discussion for the past several days is whether the overall data in the U.S. will prompt Federal Reserve Chairman Ben Bernanke to signal the central bank will take new steps to prop up growth. He’s making a highly-anticipated speech Friday at the Fed’s conference in Jackson Hole, Wyo. Read more on Treasury bonds, Bernanke.
“What concerns me is that with all the focus on Bernanke, we are not paying as much attention as we should to continuing signs of slower global growth, as seen in this morning’s European data,” said John Briggs, a bond strategist at RBS Securities.
