US Treasurys moslty higher amid economic data; Fed in focus

Traders in the 10-year bond options pit at the Chicago Board of Trade signal orders.
Frank Polich | Reuters
Traders in the 10-year bond options pit at the Chicago Board of Trade signal orders.

U.S. government debt prices were mostly higher on Monday as investors focused on economic data.

The yield on the benchmark 10-year Treasury notes, which moves inversely to price, was higher at around 2.490 percent, while the yield on the 30-year Treasury bond was higher at 3.086 percent. The two-year note yield, meanwhile was higher around 1.216 percent.

On the data front, pending home sales for December rose 1.6 percent, while personal income rose 0.3 percent, below an expected increase of 0.4 percent.


Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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Bond investors also looked ahead to the Federal Reserve's first monetary policy meeting of the year, with most expecting the central bank to hold rates steady. Market expectations for a rate hike this week are just 4 percent, according to the CME Group's FedWatch tool.

"This week is very busy ... we have a packed data calendar," said Thomas Simons, a money market economist at Jefferies in New York. "I think that may lead to a bit of a malaise to start the week here ... there isn't a lot to get going on yet."

Overseas, Greek bonds fell sharply on worries about whether the International Monetary Fund will participate in the indebted southern European country's bailout program.

Yields on short-dated bonds spiked 300 basis points, on track for their biggest one-day jump since July 2015, while 10-year bond yields rose to their highest in almost three months.

Germany said on Monday it believed the IMF would participate and that it was too early to start thinking about other possible scenarios.

But concerns were heightened after a leaked report that the Fund expects Greek debt to explode to 275 percent of GDP by 2060, analysts said.

"There's a bit of disquiet regarding the IMF's role...," said Orlando Green, European fixed income strategist at Credit Agricole. "The bottom line is that the IMF wants debt relief for Greece and the EU has taken baby steps towards this, but it is not what the IMF is looking for long-term. When there are divisions between the EU and IMF, that arouses concerns about Greece."

In oil markets, prices were dragged lower as investors grew increasingly concerned that rising production in the U.S. would offset output cuts pledged by OPEC and other producers.

Brent crude traded at around $55.24 a barrel on Monday, down 0.50 percent, while U.S. crude was around $52.68 a barrel, down 0.92percent.

—Reuters contributed to this report.