NEW YORK (CNN/Money) -
Bonds edged higher Monday as investors gambled that economic data due later this week would point to a cooling down of the U.S. economy.
The dollar ended mixed.
The benchmark 10-year Treasury note advanced 3/32 at 102-12/32 to yield 4.45 percent, down from 4.47 percent late Friday, and the 30-year bond climbed 4/32 to 102-16/32 to yield 5.20 percent, lower than 5.21 percent late Friday. Bond prices and yields move in opposite directions.
The two-year note was flat compared with late Friday, when it was 100-14/32 to yield 2.52 percent, and the five-year note was little changed, up 1/32 at 100 to yield 3.63 percent.
Bond traders hope the economic data to be announced this week will confirm that U.S. economic growth is slowing and that inflation has plateaued for the moment. Rising inflation erodes the value of the fixed interest-paying bond.
Analysts said retail sales on Wednesday are expected to show a bond-friendly drop in June, supporting the idea that consumption slowed markedly in the second quarter. (For more analysis, click here.)
"Retail sales are expected to be down, but worry about Producer Price Index and Consumer Price Index releases Thursday and Friday could keep any bond market rally in check," Chris Low, chief economist at FTN Financial, told Reuters.
The market largely brushed aside two regional manufacturing reports released Monday showing upticks in factory output in Chicago and Kansas.
Expectations for slower growth have already knocked Treasury yields lower as investors became increasingly certain that the Federal Reserve would honor its pledge to be "measured" in raising interest rates.
The euro bought $1.2404, a hair lower than $1.2410 late Friday, while the dollar fetched ¥108.27, down from ¥108.33.
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