NEW YORK (CNN/Money) -
The euro hit a record high against the dollar on Thursday while bond prices continued to fall after a slew of economic reports in thin pre-holiday trading.
In the treasury market, which ended at 2 p.m. EST ahead of Friday's market closure for Christmas, the benchmark 10-year note fell 4/32 to 100-8/32 to yield 4.22 from 4.20 percent late Wednesday. The 30-year bond fell 7/32 to 107-27/32 to yield 4.84 percent from 4.82 percent. Bond prices and yields move in opposite directions.
The two-year note was little changed at 99-23/32, yielding 3.02 percent. The five-year note fell 2/32 to 99-20/32 to yield 3.58 percent.
"The market was in no mood for an extended sell-off and recent trading ranges held with a slight steepening of the yield curve," strategists at BNP Paribas told Reuters.
Thursday's most-watched number, the core personal consumption expenditure deflator, or PCE, rose by 0.1 percent in November for an annual gain of 1.5 percent.
"It shows that underlying inflation is still tame and only slowly edging up," Jim O'Sullivan, an economist at UBS, told Reuters. "That means the Fed can take its time hiking rates. The only question is whether it keeps moving at every meeting or takes a break now and then."
Yields jumped on news of higher-than-expected December consumer sentiment from the University of Michigan, but 10-year notes faltered well below resistance at 4.25 percent.
Improved sentiment could translate into a solid holiday retail season, although the link between consumers' moods and their spending is often tenuous.
Outside market action put pressure on bonds. An end-of-year rally pushed the S&P 500 index to its highest since August 2001. Crude oil prices also slipped.
Most of Thursday's other data was in line with Wall Street expectations or -- like the sharp decline in home sales -- downplayed as a possible aberration.
The Commerce Department said sales of new homes tumbled 12 percent last month, following a revised 4.2 percent increase in October. November's 12 percent fall was the sharpest since a 23.8 percent decline in January 1994.
"This drop may be more due to temporary factors like wet weather than the beginning of a major reversal in housing," Steven Wood, economist at Insight Economics, told Reuters.
November durable goods orders were stronger than forecast but weaker once a spike in civilian aircraft orders was stripped out. All in all, it was a mixed bag of data.
In currency trading, a steep drop in November U.S. new home sales pushed the dollar to fresh lows versus the euro.
The euro rose to a new high against the dollar at $1.3506 in thin pre-holiday trading, according to Reuters data. The euro subsequently pared its gain to $1.3504 from $1.3390 late Wednesday, topping the euro's prior record of $1.3470, hit earlier in November.
Against the yen, the dollar traded lower at ¥103.64 versus ¥104.22 late Wednesday in New York.
|
.
