TREASURIES-Prices near flat as investors wait for Fed clarity
* June existing home sales data due at 10:00 a.m. ET.
* Treasury to sell $99 billion new supply this week
* Investors looking ahead to Fed next week
NEW YORK, July 22 (Reuters) - Prices for U.S. Treasuries were little changed on Monday as investors paused ahead of new supply later this week and looked for more clarity on when the U.S. Federal Reserve could slow its massive bond buying program. With little economic data on the slate, flows were light and yields were largely range bound. "We could chop around here a little bit, find the range ahead of (any) future tapering, ahead of the economic data," said Justin Lederer, a strategist at Cantor Fitzgerald in New York. Investors should instead stay light for now, he added. "Do I think we go to higher yields, yes, but probably not in the short-term," Lederer said. The Treasury will sell $99 billion in new supply this week: $35 billion in 2-year notes on Tuesday, $35 billion in 5-year notes on Wednesday and $29 billion in 7-year notes on Thursday. Those debt sales will help gauge appetite for U.S. debt as investors are weighing when the Fed could slow or even stop its asset purchase program, comprising $85 billion per month in Treasuries and mortgage-backed securities. As economic data have brightened, economists have largely shifted to seeing a slowdown in Fed buying as of September.
But Fed chief Ben Bernanke has underscored to markets that there is no pre-set date for the Fed to hit the brakes, including dovish remarks last week that helped lift bond prices for a second week. Instead, Bernanke has emphasized, any Fed decisions will be dependent on economic data, including key labor market figures. Last week's price gain took yields on benchmark 10-year debt back to around levels at the start of the month - but still above levels in May, when tapering speculation kicked into high gear. The 10-year note on Monday traded flat, yielding 2.482 percent. The 30-year bond rose 5/32 in price to yield 3.551 percent, from 3.559 percent late on Friday. More direction for the bond market could come at month-end, when Fed policymakers meet on July 30 and July 31. A statement from that meeting will be released on the second day. On a light agenda for economic data on Monday, June existing home sales data are due at 10:00 a.m. ET (1400 GMT). Economists in a Reuters poll see an annualized 5.25 million units, compared with a prior reading of 5.18 million. Other housing figures are also due this week, including new home sales on Wednesday. "Any hint of (housing) weakness, such as that seen in the housing starts and permits data, could have an outsized impact on rates after Bernanke drew attention to housing data after the unexpected and dramatic rise in rates," said Richard Gilhooly, an interest rate strategist at TD Securities in New York.