Bond prices moved higher today, but traders said things were subdued on the Treasury front with little news and economic data to drive the market.
The two-year note recently gained 2/32 to 100 4/32, moving the yield down to 4.179%. Yields and prices move in the opposite direction. On the longer end of the market, which generally indicates expectations for economic recovery and the chance of inflation, the 10-year benchmark note climbed 10/32 to 97 16/32, yielding 5.333%, while the 30-year Treasury bond gained 11/32 to 95 19/32, with a yield of 5.682%.
"It's been very, very quiet," said Alan De Rose, executive director of proprietary trading at
. De Rose said he expects the market to stay relatively quiet until receiving word about retail sales.
BTM-UBSW weekly chain store sales index and the
Redbook retail average for the month of May through June 2 will be released tomorrow. The data will offer a glimpse of the retail sector, ahead of the more closely watched
chain-store sales and
retail sales reports, which are due in the following weeks. The
Federal Reserve has been concerned about consumer spending, and retail sales would be a good indicator of how the economy is faring in light of the increased job losses in recent months.
Treasuries rallied on Friday after a double shot of economic data -- the
purchasing managers' index and the
employment report for May -- convinced investors that the economy is still weak, giving the Fed reason to keep lowering interest rates. Treasuries had rallied strongly leading up to Friday's economic reports in anticipation of weak data.
Alan Greenspan and his team of central bankers have lowered short-term interest rates by 250 basis points since Jan. 3 in a bid to jolt the economy. The July
fed funds futures contract, a measurement of the bond market's expectations for continued rate cuts, is pricing in about a 94% chance of a 25 basis point rate cut when the central bank next convenes starting June 26. The market has been pricing in no additional easing after the June meeting, and that hasn't changed.
"Greenspan's recent comments, such as inflation being under control, have told the market we're going to get 25 basis points of easing at the next meeting," De Rose said. "There's a small chance we'll get 50 depending on the news we get from now until then."