Fleursdumal
फूल की बुराई
U.S. Treasuries higher in rangebound market
NEW YORK, June 21 (Reuters) - U.S. Treasury debt prices were flat to higher on Tuesday morning, beginning a day many traders said would be characterized by range-trading.
Traders are focusing with increasing intensity on next week's Federal Reserve meeting, and what the central bank is likely to say once, as the market fully expects, it raises official rates for the ninth straight time in a year.
Two-year notes<US2YT=RR>, the most sensitive to changes interest rate expectations, were up 1/32 and yielding 3.71 percent, down from 3.72 percent on Monday. The 10-year note <US10YT=RR> rose 5/32 in price for a yield of 4.09 percent, down from 4.11 percent late on Monday. The benchmark note is trading almost in the middle of a 4.00 percent to 4.25 percent near-term range many traders have targeted.
"It's going to be pretty sideways," said one bond trader, adding that some corporate debt issuers might again make appearances in the Treasuries market as some did on Monday to hedge interest rate risk.
Goldman Sachs <GS.N> , for example, was said to be planning a $1 billion corporate bond sale on Tuesday.
Five-year Treasury notes <US5YT=RR> were up 4/32 at a yield of 3.87 percent, down from 3.89 percent on Monday.
The 30-year bond <US30YT=RR> rose 13/32 to yield 4.37 percent, compared with 4.39 percent on Monday.
Traders said U.S. debt was also rising in sympathy with euro zone debt after a bigger-than-expected half-percentage-point rate cut in Sweden fueled continuing speculation about monetary easing in the euro zone. Euro zone yields fell to one-week lows.
U.S. economic data was light on Tuesday, though two reports on U.S. chain store sales reflected renewed strength based on purchases of summer-related merchandise.
One factor hanging over the market, though relegated to the background at the start of Tuesday's session, was the spiking price of oil, which on Monday settled above $59 a barrel in the New York futures market.
Traders also noted an article on Bloomberg News by long-time Fed watcher John Berry that said the Fed was likely to continue to raising rates "several" more times before ending its credit tightening cycle.
The piece captured what appears to be changing views in the market about the interest rate outlook.
"It's not much, but people are talking about Berry," the trader said.
The newer, more hawkish, speculation marks a shift from fairly commonly expressed views last month that the Fed might slow the pace of rate increases given a slowdown in manufacturing growth during the spring.
The central bank has raised its federal funds rate by 2.00 percentage points in the last year to 3.00 percent. Financial markets expect a quarter-point increase at the end of its June 29-30 meeting, and at least two, possibly three more hikes after that before the end of the year. That would bring its target rate that banks charge each other for overnight loans to 4.00 percent.
Spiking oil prices could change all those forecasts.
The International Monetary Fund estimates that a sustained rise of $5 per barrel in oil prices trims about a quarter of a percentage point off world growth.
Oil prices, driven by speculation as well as fears of supply disruption due to terrorism and Middle East conflict, have more than doubled in two years.
Some in the bond market see high oil prices as bond-friendly to the extent that high energy prices could retard growth. But others see it as a sign of inflation that could lead to higher rates.
NEW YORK, June 21 (Reuters) - U.S. Treasury debt prices were flat to higher on Tuesday morning, beginning a day many traders said would be characterized by range-trading.
Traders are focusing with increasing intensity on next week's Federal Reserve meeting, and what the central bank is likely to say once, as the market fully expects, it raises official rates for the ninth straight time in a year.
Two-year notes<US2YT=RR>, the most sensitive to changes interest rate expectations, were up 1/32 and yielding 3.71 percent, down from 3.72 percent on Monday. The 10-year note <US10YT=RR> rose 5/32 in price for a yield of 4.09 percent, down from 4.11 percent late on Monday. The benchmark note is trading almost in the middle of a 4.00 percent to 4.25 percent near-term range many traders have targeted.
"It's going to be pretty sideways," said one bond trader, adding that some corporate debt issuers might again make appearances in the Treasuries market as some did on Monday to hedge interest rate risk.
Goldman Sachs <GS.N> , for example, was said to be planning a $1 billion corporate bond sale on Tuesday.
Five-year Treasury notes <US5YT=RR> were up 4/32 at a yield of 3.87 percent, down from 3.89 percent on Monday.
The 30-year bond <US30YT=RR> rose 13/32 to yield 4.37 percent, compared with 4.39 percent on Monday.
Traders said U.S. debt was also rising in sympathy with euro zone debt after a bigger-than-expected half-percentage-point rate cut in Sweden fueled continuing speculation about monetary easing in the euro zone. Euro zone yields fell to one-week lows.
U.S. economic data was light on Tuesday, though two reports on U.S. chain store sales reflected renewed strength based on purchases of summer-related merchandise.
One factor hanging over the market, though relegated to the background at the start of Tuesday's session, was the spiking price of oil, which on Monday settled above $59 a barrel in the New York futures market.
Traders also noted an article on Bloomberg News by long-time Fed watcher John Berry that said the Fed was likely to continue to raising rates "several" more times before ending its credit tightening cycle.
The piece captured what appears to be changing views in the market about the interest rate outlook.
"It's not much, but people are talking about Berry," the trader said.
The newer, more hawkish, speculation marks a shift from fairly commonly expressed views last month that the Fed might slow the pace of rate increases given a slowdown in manufacturing growth during the spring.
The central bank has raised its federal funds rate by 2.00 percentage points in the last year to 3.00 percent. Financial markets expect a quarter-point increase at the end of its June 29-30 meeting, and at least two, possibly three more hikes after that before the end of the year. That would bring its target rate that banks charge each other for overnight loans to 4.00 percent.
Spiking oil prices could change all those forecasts.
The International Monetary Fund estimates that a sustained rise of $5 per barrel in oil prices trims about a quarter of a percentage point off world growth.
Oil prices, driven by speculation as well as fears of supply disruption due to terrorism and Middle East conflict, have more than doubled in two years.
Some in the bond market see high oil prices as bond-friendly to the extent that high energy prices could retard growth. But others see it as a sign of inflation that could lead to higher rates.
o poca voglia?