Treasuries Mixed After Retail Sales Rebound

NEW YORK -- U.S. Treasury bond prices were mixed Monday morning, after the Commerce Department reported that consumer spending rebounded in July following a weak June.

In addition, early gains in the stock market were denting demand for bonds.

At 11 a.m. EDT, the 10-year Treasury note was down 31 cents per $1,000 in face value, or 1/32 point, from its level at 5 p.m. Friday. Its yield, which moves in the opposite direction, rose to 4.81 percent from 4.80 percent.

The 30-year bond rose 2/32 point. Its yield fell to 5.02 percent from 5.03 percent.

The 2-year note fell 2/32 point. Its yield rose to 4.49 percent from 4.46 percent.

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Yields on 3-month Treasury bills were 4.74 percent as the discount rate rose 0.18 percentage point to 4.61 percent.

The Commerce Department reported that retail sales rebounded 0.3 percent last month. That increase exceeded the 0.2 percent rise expected by Wall Street.

There were slight gains across a broad spectrum of sectors, the data showed. Weakness was concentrated in auto and gasoline sales. Excluding autos and gas, retail sales rose 0.6 percent in July after remaining unchanged the previous month.

The bond market also was eyeing the Federal Reserve's actions on liquidity. The New York Federal Reserve injected just $2 billion in liquidity into the market on Monday, well below the $52 billion requested by banks and other institutions, according to a post on the New York Fed's Website. The $2 billion was injected in the form of overnight repurchase agreements and purchases of Treasurys and agency debt.

By contrast, on Friday central banks in the U.S., euro zone and Asia injected billions of dollars, led by an $84 billion injection from the European Central Bank. On Monday the ECB put an additional $65 billion into the banking system.

Editor's note:
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