U.S. Treasuries were mixed as the market chewed on the latest economic data, and the long bond rose as the
Producer Price Index report eased inflation fears.
Recently, the two-year Treasury note lost 2/32 to 98 19/32, yielding 4.096%. Yields and prices move in opposite directions. The 10-year benchmark note gained 1/32 to 98 7/32, yielding 5.238%, while the 30-year Treasury bond gained 9/32 to 96 9/32, lowering the yield to 5.633%.
Dealers said shorter-term maturities came under pressure following the weaker-than-expected
retail sales report and fewer concerns about
Argentina. Retail sales in June rose 0.2%, the
data indicated. Economists were expecting sales to tick up 0.3%. Excluding auto sales, retail sales fell 0.2%, while the forecast called for an increase of 0.2%.
"The headline numbers looked worse than they really are after revisions," said Mario DeRose, Treasury strategist at
. "If you take into account the lower food and gas prices, they're not as bad."
Inflation expectations lessened further as the latest Producer Price Index, released this morning, posted its largest drop in more than two years. The data gave the long end of the bond market a lift, traders said, as longer-term securities tend to be more sensitive to the threat of higher prices.
But the "global economy is a lot more in the buyers' eyes," said Dave Winter, a trader at
Zions First National Bank
, referring to the impact that Argentina's simmering financial crisis has had on U.S. Treasuries. The bond market was jazzed Thursday as
investors fled Argentine paper.
"We really haven't heard anything today as far as Argentina goes," said De Rose. "The situation's on hold at least for now. The market's still flip-flopping and looking for direction. The big thing next week is
Alan Greenspan speaking on Wednesday to the House. Before that, it's going to be tough to find anything to move the markets."