BOND REPORT: Treasury Yields Hold Steady In Pre-holiday Stream Of Economic Data

By FeaturesDow Jones Newswires

Treasury yields held steady on Friday after a mixed set of economic data in quiet, pre-holiday trade.

Trading will close early at 2 p.m. Eastern (http://www.marketwatch.com/story/when-do-financial-markets-close-for-christmas-2017-12-20)for the Christmas Holidays, on the recommendation of the Securities Industries Financial Markets Association. Markets will be closed on Dec. 25.

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How are Treasurys doing?

The yield for the benchmark 10-year Treasury note was flat at 2.485%, compared with 2.483% on late Thursday. The 2-year note yield was up at 1.891%, from 1.877%. The 30-year bond yield was down to 2.842%, versus 2.834%.

Bond prices move inversely to yields.

What's driving markets?

Traders contended with a raft of first-tier economic data. Core measures for personal consumption expenditure, which strip out for food and oil prices, rose 0.1%, as expected. The figures could paint a clearer outlook for fourth-quarter growth and help analysts see whether inflation will perk up from its recent weakness soon.

That's important because the Federal Reserve needs a string of strong inflation readings to give the headroom it needs to raise rates further in 2018, which could be bearish for bonds.

See: Consumers spent their savings in November (http://www.marketwatch.com/story/consumers-spent-their-savings-in-november-2017-12-22)

Durable goods orders (http://www.marketwatch.com/story/durable-goods-orders-rise-13-in-november-2017-12-22), a gauge of investment, rose 1.3% in November. Economists polled by MarketWatch had expected 2% gain. Despite the weaker-than-expected data, economists are still expecting an impressive finish to the year, after third-quarter GDP stood at 3.2%.

Later, new home sales will be released at 10 a.m., along with consumer sentiment data.

What are market participants saying?

"We anticipate that a rebound in core inflation next year will prompt the Fed to step up the pace of policy tightening and deliver four rate hikes in 2018," wrote Michael Pearce, senior U.S. economist for Capital Economics.

What else is on investors' radar?

Congress passed a stopgap funding bill on Thursday to keep the government lights on until mid-January.

(END) Dow Jones Newswires

December 22, 2017 09:57 ET (14:57 GMT)