Bonds

Bond prices rise on weak business-spending data

Treasurys


U.S. Treasurys prices rose on Friday as data showing weakness in U.S. business investment in March supported the view that it is unlikely the Federal Reserve will signal next week it is close to raising interest rates.

The absence of a breakthrough in debt negotiations between Greece and its creditors also underpinned safe-haven demand for low-risk government debt, analysts said.

In advance of the two-day Federal Open Market Committee meeting that will begin next Tuesday, benchmark yields have traded in a 21 basis point range between 1.80 percent 2.01 percent in the past four weeks.

"We expect the FOMC to leave everything on the table and maintain a similar tone to the last statement," said Ira Jersey, head of U.S. interest rate strategy at Credit Suisse in New York. "We think the long end will remain relatively stable even if the Fed does become a bit more hawkish."

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A wave of disappointing domestic data since the previous FOMC meeting has spurred economists to downgrade their outlooks for the U.S. economy in 2015. The U.S. Commerce Department said on Friday non-defense capital goods orders, excluding aircraft, a closely watched proxy for business spending plans, fell 0.5 percent last month.

In overseas developments, Greece offered some concessions on Friday on reforms demanded by international lenders in return for new funding, but euro zone creditors said negotiations must speed up to get a deal done by June, when the Greek government is expected to run out of cash.

The rise in Treasurys prices was muted by record highs on the Nasdaq and the together with a pullback in German Bunds, whose 10-year yields were on track for their biggest weekly rise since December.

In early afternoon trading, benchmark U.S. 10-year Treasury notes were yielding 1.922 percent, down 2 basis points from Thursday. The 10-year yield was set to rise 7 basis points on the week after hitting 1.993 percent on Wednesday, which was the highest in 3-1/2 weeks, according to Reuters data.

The 30-year bond yield was at 2.621 percent, down 3 basis points. The yield was on track to rise 11 basis points on the week.