Bonds

US Treasury yields rise as consumer spending surges in March

Key Points
  • Market participants eagerly await a meeting of the U.S. Federal Reserve and the publication of Chinese factory data for further clues on policy direction in the world's largest economies.

U.S. government debt prices fell on Monday a government report showed consumer spending surged to its highest level in 9 and a half years in March.

Treasurys

The yield on the benchmark 10-year Treasury note, which moves inversely to price, was 1.33% higher at around 2.5355, while the yield on the 30-year Treasury bond was also higher at around 2.9519.

Consumer spending rose 0.9% overall and 0.7% when adjusted for inflation, driven by a jump in expenditures on motor vehicles and health care. Meanwhile, the core personal consumption expenditures was flat for the month and up 1.6% year over year, and the headline number rose 0.2% for a 1.5% increase over the year.

Market participants eagerly await a meeting of the U.S. Federal Reserve and the publication of Chinese factory data for further clues on policy direction in the world's largest economies.

It comes after the U.S. reported stronger-than-anticipated growth over the first three months of the year. Official data showed gross domestic product (GDP) stood at an annualized rate of 3.2% in the first quarter, beating analyst expectations.

The U.S. central bank's Federal Open Market Committee (FOMC) is due to announce its latest monetary policy decision on Wednesday.

Meanwhile, the U.S. Treasury is set to auction $39 billion in 13-week bills and $36 billion in 26-week bills.

Elsewhere, oil prices slipped during morning trade, extending a slump from the previous session after President Donald Trump demanded that OPEC raise output to soften the impact of U.S. sanctions against Iran.

International Brent crude traded at $71.71 Monday morning, down over 0.6%, while U.S. West Texas Intermediate (WTI) stood at $62.91, around 0.6% lower.