By Luciana Lopez and Chris Reese
NEW YORK, Jan 31 (Reuters) - U.S. Treasuries were little
changed in price on Thursday after data painted a mixed picture
of the U.S. economy, with uncertainty about growth in coming
quarters keeping yields within recent ranges.
Investors also looked ahead to key nonfarm payrolls data on
Friday for more light on whether jobs are increasing fast enough
to satisfy policymakers.
Initial weekly jobless claims rose off five-year lows to
levels consistent with tepid job growth, data showed on
Thursday, with claims rising more than expected.
Data also showed U.S. income growth surged in December as
companies hurried to make dividend payments before higher tax
rates set in, while the pace of business activity in the U.S.
Midwest picked up in January from a more than three-year low the
'The bond market faces some headwinds in its conflict with
the direction of the economy and how much risk-on versus
risk-off is appropriate. So far this year, data is all over the
board and investors are torn between what they are hoping for
and what they are seeing,' said Kevin Giddis, managing director
of fixed income at Morgan Keegan in Memphis, Tennessee.
Benchmark 10-year Treasury notes were trading
1/32 higher in price on Thursday with the yield little changed
from late Wednesday at 1.99 percent. Ten-year yields continued
testing the 2 percent level, as they have since Monday, but
found traction difficult.
While the easing of global stresses, including the euro zone
debt crisis, means that 'people aren't really desperate to own
Treasuries,' there are still question marks keeping investors
wary, said Kim Rupert, managing director of global fixed income
analysis at Action Economics LLC in San Francisco.
From the possibility of automatic spending cuts at the start
of March to lingering worries that the Fed will at some point
cut off its easing spigot, investors are reluctant to push
Treasuries outside recent ranges, she said.
'We're still just trying to get a clean reading, but it
doesn't look like growth is going to pick up substantially
anytime soon,' she said.
Ten-year Treasuries could see yields within the range of
around 1.70 percent to 2.10 percent in coming sessions, said
William O'Donnell, head of U.S. Treasury strategy at RBS
Securities in Stamford, Connecticut.
Recent higher yields have lured some investors back into
buying, he said. 'I think people like the levels.'
Thursday's data came after the U.S. Federal Reserve ended a
two-day meeting on Wednesday by leaving in place its $85 billion
per month asset buying program as the economy was paused.
After a week packed with economic data, including
disappointing fourth-quarter U.S. growth domestic product and
the Fed meeting, investors are now turning their attention to
the last major milestone of the week: nonfarm payrolls data on
The median of forecasts from analysts polled by Reuters is
for U.S. employers to have added 160,000 new jobs in January, up
slightly from 155,000 new positions in December. The
unemployment rate is expected to be unchanged from 7.8 percent
(Editing by Chizu Nomiyama)
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Keywords: MARKETS USA BONDS/
(-------MARKET SNAPSHOT AT 2:11 p.m. EST (1911 GMT)------- March T-Bond 143-11/32 (+09/32) March 10-Year note 131-08/32 (+02/32) Change vs Current Nyk yield Three-month bills 0.0675 (+0.00) 0.068 Six-month bills 0.11 (+0.00) 0.111 Two-year note 99-31/32 (+) 0.266 Five-year note 99-31/32 (-01/32) 0.881 10-year note 96-25/32 (+01/32) 1.989 30-year bond 91-26/32 (+02/32) 3.178 DOLLAR SWAP SPREADS LAST Change U.S. 2-year dollar swap spread 16.50 (+0.75) U.S. 3-year dollar swap spread 16.75 (+0.75) U.S. 5-year dollar swap spread 14.50 (+0.50) U.S. 10-year dollar swap spread 7.50 (+0.50) U.S. 30-year dollar swap spread -17.00 (unch))
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