BLBG: Treasuries Advance After January U.S. Retail Sales Grow Less Than Forecast
Treasuries rose, pushing 10-year note yields to a one-week low, after a report showed retail sales were weaker than forecast in January, renewing concern consumer activity will impede the economic recovery.
U.S. retailers’ sales climbed as Americans took advantage of post-holiday discounts, showing households are being frugal in their spending. Treasury yields advanced earlier as German investor confidence rose in February more than forecast and Italy’s borrowing costs dropped. Moody’s Investors Service cut the credit ratings of six European countries.
“The market looks like it’s leaning from the short side, so we’re seeing a bit of buying,” said Paul Horrmann, a broker in New York at Tradition Asiel Securities Inc., an interdealer broker. “We had a lot of downgrades overnight and that put a bid in the market.” A short position is a bet that an asset will decrease in value.
Yields on 10-year notes fell two basis points, or 0.02 percentage point, to 1.95 percent at 8:45 a.m. New York time, according to Bloomberg Bond Trader prices, the lowest since Feb. 7. The 2 percent securities maturing in February 2022 rose 6/32, or $1.88 per $1,000 face amount, to 100 13/32.
U.S. 30-year bond yields fell two basis points to 3.10 percent.
The 0.4 percent retail sales gain followed little change in December that was initially reported as a 0.1 percent increase, Commerce Department figures showed today. Last month’s advance was half the 0.8 rise median forecast of economists surveyed by Bloomberg News, reflecting an unexpected drop at auto dealers. Excluding cars, demand climbed 0.7 percent, more than projected.
To contact the reporter on this story: Susanne Walker in New York at swalker33@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
