BOND REPORT: Treasury Yields Edge Higher After Trading Around Weeklong Low

By Sunny Oh Features Dow Jones Newswires

PCE inflation slows to 0.2%, the first decline in 14 months

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Treasury yields edged up, as prices fell, from a weeklong low as economic reports showed that consumer spending in the U.S. economy was slowing down and as inflation appeared muted.

The yield for the 10-year Treasury note rose a 0.5 basis point to 2.290%. Bond prices move in the opposite direction as yields; one basis point is one hundredth of a percentage point.

The 2-year note slipped 0.4 basis point to 1.266%, while the yield for the 30-year, or the long bond, rose a 1.4 basis point to 2.969%. With both Asia and Europe on vacation for May Day, Treasurys trading opened early morning at 6 a.m.

This week is crowded with economic data releases. To kick it off, personal-income data showed a 0.2% increase in March, in line with expectations.

Real spending rose 0.3% in March after two consecutive declines in January and February. Personal-consumption expenditures index, or PCE, the Federal Reserve's preferred measure of inflation, fell 0.2% for the month, the first decline in 14 months. Treasury yields rose slightly following the economic reports.

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See: U.S. inflation retreats in March from 5-year peak (http://www.marketwatch.com/story/us-inflation-retreats-in-march-from-5-year-peak-2017-05-01)

Also on deck is the Federal Open Market Committee, the Fed's policy setting group, will meet on Tuesday and Wednesday to deliver an updated policy outlook. Market participants aren't anticipating a rate hike but are expecting clues on the pace of rate increases and more insight into the health central bank's view on U.S. economic health.

See: Fed to signal rate-hike plan in place despite soft economic data (http://www.marketwatch.com/story/fed-to-signal-rate-hike-plan-in-place-despite-soft-economic-data-2017-04-27)

(END) Dow Jones Newswires

May 01, 2017 10:04 ET (14:04 GMT)