U.S. Government Bonds Inch Lower

U.S. government-bond prices edged lower Monday, on track to notch a monthly loss.

The yield on the 10-year U.S. Treasury note was recently at 2.303%, according to Tradeweb, compared with 2.291% on Friday and 2.298% at the end of June. Yields rise as bond prices fall.

Government bonds have traded in a narrow range in July as investors have increasingly taken the view that global central banks won't rush to raise rates, given a recent streak of soft inflation data. Concerns that central banks outside of the U.S. would move away from highly accommodative monetary policy even as economic momentum was slowing triggered a selloff in global bonds at the end of June.

More recently, however, central bank officials in the U.S. and Europe have highlighted a slowdown in inflation -- leading investors to believe the Federal Reserve, among other banks, will be cautious in tightening monetary policy.

That should keep Treasurys range-bound for now, investors and analysts say, especially if the chances of potential policy changes from Washington -- such as tax cuts and fiscal stimulus -- don't appear to materially change.

Elsewhere, German government bonds weakened after data showed core inflation in the eurozone growing by 1.2% in July, slightly faster than analysts expected. Inflation tends to weaken demand for government bonds since it chips away at the purchasing power of their fixed returns.

The yield on the 10-year German government bond was recently at 0.559%, according to Tradeweb, up from 0.539% on Friday.

Later this week, investors' focus will turn to the monthly jobs report, which economists surveyed by The Wall Street Journal expect will show nonfarm payrolls rising by 180,000 in July and average hourly wages ticking up by 0.3%. Signs of accelerating wage growth could put pressure on bonds, although many traders say they are expecting tepid figures again.

Write to Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

July 31, 2017 10:06 ET (14:06 GMT)