By Deborah Levine, MarketWatch
SAN FRANCISCO (MarketWatch) — Treasury prices rose on Monday, pushing yields down for the sixth session in seven, as the lack of major data and low trading volumes gave traders little fodder ahead of Federal Reserve Chairman Ben Bernanke’s speech at a Fed retreat on Friday.
Yields on 10-year notes 10_YEAR -2.07% , which move inversely to prices, fell 4 basis points to 1.65%. They haven’t closed below that level since Aug. 13, according to FactSet. A basis point is one one-hundredth of a percentage point.
Bond prices fell on Friday, pushing yields up but still leaving a weekly decline in yields that was the best for benchmark 10-year notes since mid-June. Concerns about what European political leaders, the European Central Bank and the Federal Reserve will do in the next month created enough uncertainty to keep U.S. bonds attractive. Read about bond rally next week.
Last week, speculation that the Fed would launch a new bond-buying program rose markedly after the release of minutes from the last policy meeting. But some analysts said those expectations for a third round of quantitative easing may need to ratcheted back. The Fed minutes also showed officials talked about changing its statement, which for months has said rates will remain low until late 2014.
“We think Bernanke acknowledges some data improvement but more so emphasizes uncertainty, the Fed’s willingness to do something and, if we had to make a call, hints at extending the forward guidance language a bit heavier than QE3,” said David Ader and Ian Lyngen, bond strategist at CRT Capital Group.
Deborah Levine is a MarketWatch reporter, based in New York.
