Treasury Prices U.S. Edge Higher

By Sam GoldfarbFeaturesDow Jones Newswires

U.S. government bond prices edged higher Monday as the market remained stuck in a tight range despite last week's solid jobs report.

The yield on the 10-year Treasury note settled at 2.258%, compared with 2.269% Friday.

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Yields, which rise when bond prices fall, climbed modestly Friday after the Labor Department reported that the economy added 209,000 jobs in July, while average hourly earnings increased 2.5% from the previous year. Those numbers were better than many analysts expected but not enough to break the market out of a roughly three-week holding pattern.

After nearly reaching 2.4% in early July, the 10-year yield quickly fell to around 2.23% and has since been hovering between 2.23% and 2.33%.

Conflicting forces are keeping yields fairly steady, investors and analysts say.

Following a run of soft inflation data, investors don't expect the Federal Reserve to raise interest rates again until December at the earliest. That has given them reason to buy bonds, driving yields lower, because rising inflation and higher interest rates are the main threats to government debt.

At the same time, the global economy looks to be on firm footing, and major central banks appear ready to tighten monetary policy simultaneously if inflation does pick up -- a prospect that has kept yields well above the historically low levels they reached last year.

This week, bond prices could be weighed down by new debt issuance. A $24 billion auction of three-year Treasury notes is scheduled for Tuesday, followed by $23 billion of 10-year notes Wednesday and $15 billion of 30-year bonds Thursday. Analysts also expect a big week for corporate bond sales as businesses try to catch investors before they leave for summer vacation.

Other major events this week include a speech by Federal Reserve Bank of New York President William Dudley on Thursday and consumer-price index data on Friday.

Mr. Dudley's speech will be closely watched because it comes shortly before the Fed's Jackson Hole, Wyo., conference at the end of the month and could "set the tone" for that event, said Russ Certo, managing director of rates at Brean Capital LLC.

Write to Sam Goldfarb at

(END) Dow Jones Newswires

August 07, 2017 15:59 ET (19:59 GMT)