MW: Treasurys in ‘holding pattern’ before Bernanke
By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices on Tuesday edged up but overall showed little change. Investors largely shrugged at the latest economic reports and waited to hear from the Federal Reserve’s chairman before making any big bets.
The 10-year Treasury note 10_YEAR +0.32% yield, which moves inversely to price, dipped 2 basis point to 2.527%.
The 30-year bond 30_YEAR -0.11% slipped 1 basis point to 3.582%, while the 5-year note 5_YEAR +0.36% yield edged down 1 basis point to 1.362%.
Tuesday’s economic reports have come in better than expected or roughly in line with forecasts.
The Labor Department said U.S. consumer prices rose a seasonally adjusted 0.5% in June. The core CPI, which excludes volatile food and energy costs, inched up 0.2%. Economists surveyed by MarketWatch had expected a 0.5% increase in the broad CPI and a 0.2 % gain in the core rate.
The Fed said industrial production rose 0.3% in June, stronger than the 0.1% expected in a MarketWatch-compiled economist poll. And a gauge of confidence among home builders rose to 57 in July, the highest level since January 2006 and above forecasts for 52.
Traders are waiting for comments on Wednesday and Thursday from Fed Chairman Ben Bernanke. The Fed chief will deliver his semiannual testimony to Congress, speaking about the central bank’s bond-buying program and the economic outlook.
Some analysts expect Bernanke will sound dovish in his prepared remarks, but he could become more hawkish in the question-and-answer session with lawmakers.
“The market is in a bit of a holding pattern until we hear from the chairman tomorrow,” said Ian Lyngen, senior rates strategist at CRT Capital Group.
Lyngen said the market wasn’t able to “get any directional motivation” from the CPI data, and it also “kind of ground sideways” after the report on industrial production.
U.S. stocks were also little changed on Tuesday, as earnings reports came in mixed.
Victor Reklaitis is a New York-based markets writer for MarketWatch. Follow him on Twitter @VicRek.
