MW: Treasurys extend gains after weak retail sales
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices extended gains on Monday, pushing benchmark yields towards their all-time lows, after a report showed U.S. retail sales unexpectedly fell 0.5% in June.
Yields on 10-year notes 10_YEAR -2.28% , which move inversely to prices, fell 4 basis points to 1.45%. A basis point is one one-hundredth of a percentage point. Analysts said the intraday low is around 1.44%.
Five-year-note yields 5_YEAR -4.78% decreased 4 basis points to 0.59%. Their all-time closing low is 0.62%.
Yields on 30-year bonds 30_YEAR -1.78% declined 5 basis points to 2.53% — near the record low set in early June.
The retail-sales data indicate Americans were more tentative in their purchases, which doesn’t bode well for growth prospects, increasing the appeal of Treasury debt relative compared to more growth-sensitive assets.
“The market is of course doing a bit better,” said David Ader, head of government bond strategy at CRT Capital Group. It “should take GDP forecasts down further.”
Treasurys were up slightly before the data as reports about how Spanish bank bondholders may be treated raised investors’ uneasiness about the continuing sovereign debt crisis.
Long-term Treasury yields have fallen for six of the past seven sessions on weaker U.S. jobs data, a lack of proactive steps from Europe and signals that the Federal Reserve is not priming the market to stimulate growth. Read about recent Treasury rally.
Deborah Levine is a MarketWatch reporter, based in New York.
