By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices slipped Monday, pushing 10-year yields back up toward six-month highs, after strong Chinese data was released over the weekend, but Chinese officials opted not to raise interest rates as so many had anticipated.
Yields on 10-year notes (UST10Y 3.35, +0.03, +0.87%) , which move inversely to prices, rose 2 basis points to 3.35%. A basis point is 0.01%.
Earlier, yields on the benchmark securities reached 3.40%.
Yields on 30-year bonds added 1 basis point to 4.43%. (UST30Y 4.46, +0.03, +0.63%)
“Surprise that the Chinese haven’t tightened has allowed for a small global stock and commodity rally,” said Thomas di Galoma, head of U.S. fixed-income trading for Guggenheim Securities. “Treasurys have taken it on the chin.”
Economic data are limited in coming days, although traders will focus on the Federal Reserve’s last meeting of the year on Tuesday.
Also, the Fed will hold four buyback operations this week, starting with purchases of 2016–17 debt during the session. The central bank previously said it expects to buy between $7 billion and $9 billion of the securities. See recent buyback operations.
Still, bond dealers and investors expect Treasury yields to rise more convincingly next year, after it looks more likely that Congress and the White House will approve a tax package expected to boost consumer spending and growth. See story on Treasury outlook for 2011.
Last week, 10-year yields jumped by the most since August 2009. Read about Treasury bond sell-off.
