NEW YORK (CNNfn) - Treasury bonds ended higher Monday as investors fled a volatile stock market, scurrying for a safe haven in government securities.|
The bond market traded inversely to stocks throughout the session, with government securities benefiting from "flight to quality" trades as investors pulled money out of stocks into bonds. With U.S. stocks recovering from their worst levels of the day, the gains in bonds contained.
"We're tick for tick with the stock market," said Ted Ake, trader at First Union Securities.
Shortly before 3 p.m. ET, the 30-year bond rose 4/32 to 101-4/32. Its yield, which moves inversely to its price, fell to 6.16 percent from 6.19 percent Friday. The 10-year Treasury note gained 1/32 to 100-28/32, its yield dropping to 6.37 percent from 6.39 percent Friday.
News that Japan's gross domestic product fell for a second consecutive quarter prompted a sharp sell-off among global equity markets in overnight trade.
Wait and see on data
In addition to a volatile stock market, investors faced a heavy economic calendar this week. Analysts said there was nervousness ahead of the reports, which are expected to be strong, and may heighten investors' fears of inflation and higher interest rates.
"The outlook for the week is a rough one," said Tony Crescenzi, senior market strategist at Miller Tabak & Co. "The odds are, one of the big numbers will bring prices down enough that potential buyers can buy Treasurys cheaper."
Tuesday's calendar includes February retail sales. Analysts surveyed by Reuters estimate retail sales to have increased 1 percent in February against a 0.3 percent gain in January.
Later in the week, the February producer price index and February consumer price index are scheduled. Both indexes measure inflation and should provide clues to upcoming monetary policy.
The Fed has increased short-term interest rates four times since June in order to slow the economy and control inflation. However, consumer spending and confidence remain strong, and analysts widely expect the central bank to hike rates again when it meets March 21.
(Click here for a look at Briefing.com's economic calendar.)
The Chicago Board of Trade (CBOT) Monday announced it will launch futures and options contracts on 10-year agency notes. The contracts, which will start trading Wednesday, represent the first time in 13 years agency futures have traded on CBOT.
The U.S. dollar fell against the major currencies Monday. Shortly before 3 p.m. ET, the dollar changed hands at 105.57 yen, down from 106.32 yen Friday, a 0.7percent loss in the dollar's value.
Meanwhile, the euro traded at 96.47 cents, up from 96.23 cents Friday, a 0.3 percent loss in the dollar's value.