BOND REPORT: Treasurys Tread Water Ahead Of Inflation Reports, Other Data

By William Watts, MarketWatch Features Dow Jones Newswires

Treasurys saw little movement Monday, with yields flat to marginally higher as investors awaited a heavy flow of data Tuesday and through the rest of the week.

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The yield on the benchmark 10-year Treasury note edged up 0.2 basis point to 2.297%, while the yield on the 2-year note was flat at 1.355%. The yield on the 30-year Treasury bond , known as the long bond, was virtually unchanged at 2.902%. Yields and debt prices move in opposite directions.

The data calendar is crowded Tuesday, with investors awaiting figures on personal income and spending at 8:30 a.m. Eastern, along with the Fed's favorite inflation indicator, the personal-consumption expenditures index.

See:Economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

Economists surveyed by MarketWatch produced a median forecast for a 0.3% rise in personal income and a 0.1% pickup in spending in June. The core inflation measure is expected to show a rise of 0.1%. Later in the morning, investors will see the closely watched Institute for Supply Management manufacturing index, which is forecast to slip to 56.2% in July from 57.8%, and June construction data.

A 0.1% rise in the core PCE reading would be consistent with an annual inflation rate of 1.3%, which would remain "still some way" from the Fed's 2% target," wrote Steven Barrow, currency and fixed-income strategist at Standard Bank.

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"In all we think the data will be a bit of a mixed bag with some weakness and some strength and all that might do is make the market bed down and await key payroll data on Friday," he said.

See:Ignoring Washington chaos, companies likely kept up strong hiring in July (http://www.marketwatch.com/story/ignoring-washington-chaos-companies-likely-kept-up-strong-hiring-in-july-2017-07-30)

Later this week, the July jobs report due Friday is expected to show the U.S. economy added 180,000 new jobs in July after nonfarm payrolls rose by 222,000 in June. The unemployment rate is expected to tick down to 4.3% from 4.4% while average hourly earnings are expected to show a 0.3% rise.

Treasury traders, meanwhile, paid little heed to turmoil in Washington, D.C., including t (http://www.marketwatch.com/story/ex-marine-kelly-in-ex-wall-streeter-scaramucci-out-why-trump-made-switch-2017-07-31)he departure Monday of Anthony Scaramucci (http://www.marketwatch.com/story/ex-marine-kelly-in-ex-wall-streeter-scaramucci-out-why-trump-made-switch-2017-07-31) as communications director after a tumultuous 10-day tenure.

"If U.S. 10-year notes are the heart of financial markets, then they aren't beating very fast," wrote analysts at Société Générale. "July's range was a paltry 15 [basis points] and at 2.30% we're smack in the middle of it as August starts."

(END) Dow Jones Newswires

August 01, 2017 08:27 ET (12:27 GMT)