U.S. Treasuries prices edged up on Monday amid receding investor worries over an earlier-than-expected interest-rate hike by Federal Reserve policymakers.
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Treasuries had rallied on Friday, when U.S. employment data for July showed flat wage gains for hourly workers and a rise in the national unemployment rate to 6.2 percent.
The data calmed fears about inflation, which could spur higher interest rates and lower bond prices.
On Monday, prices rose for both intermediate and long maturities, with 3-year to 7-year maturities at center stage, according to Jake Lowery, portfolio manager at Voya Investment Management in Atlanta.
"Intermediate maturity Treasuries continue to rally as a follow-up to Friday, when they did the same. The market seems comfortable with the Fed statement last week and the uptick in unemployment," Lowery said. "We are likely to stay in a low volatility environment for some time."
Most of Wall Street's top bond firms see no move by the Fed to increase interest rates from historic lows before the second half of next year, a Reuters poll showed on Friday.
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Fed policymakers are under little pressure to bring rate raises forward because the U.S. economy is growing moderately and Europe is battling high unemployment and slow growth, according to Robert Tipp, chief investment strategist at Newark-based Prudential Fixed Income.
"The euro zone is in the situation that the U.S. was in 2008 or 2009," Tripp said. "The European Central Bank is going to be standing on the accelerator with both feet for at least the next two or three years trying to get growth to speed up. If their (interest rate) cost is extremely low, that is going to exert some gravitational pull on U.S. rates."
German 10-year bunds yield about 1.14 percent, while 10-year Treasuries pay out more than double that at nearly 2.5 percent, Tipp said.
In late New York trading, benchmark 10-year notes were last up 5/32 in price to yield 2.49 percent, down from 2.495 percent at Friday's close. The 30-year was up 3/32 to yield 3.29 percent.
Among intermediate maturities, the 7-year was ahead 4/32 and yielding 2.14 percent, down from 2.15 percent at the close on Friday.
Investor buying patterns are shifting, with some demand leaving the market's long end, Lowery said. The buying had narrowed the differences among Treasuries maturities.
"Over the last couple of months, the curve has flattened relentlessly, with the 30 generally outperforming the rest of the curve," he said. "That's based on some strong demand that the market has been seeing from foreign central banks, as well as some large money managers. Buying from those sources seems to have slowed down in the past week or so."
(Reporting By Michael Connor in New York; Editing by Bernadette Baum and Meredith Mazzilli)