Treasuries up for second week

Treasuries rose for a second week as uneven U.S. economic data suggested the Federal Reserve will be slow to raise interest rates.

The yield on the 30-year bond touched the lowest in more than a year as a report showing manufacturing in the New York region fell more than forecast added to signs the U.S. economy is struggling to gain traction. Economists reduced year-end forecasts for the benchmark 10-year note to below 3 percent for the first time in more than a year. Treasuries have returned 4.12 percent this year, after losing 3.4 percent in 2013.

“You’re seeing economic data that are not by any means becoming poor, but they are not showing the strength the market was looking for in order to assume the Fed may have to raise rates,” said Jason Rogan, managing director of U.S. government trading at Guggenheim Securities, a New York-based brokerage for institutional investors.

Thirty-year bond yields fell one basis point, or 0.01 percentage point, to 3.18 percent at 9:20 a.m. in New York, according to Bloomberg Bond Trader data. They touched 3.17 percent, the lowest level since June 2013. The yields have dropped five basis points this week.

Ten-year yields fell one basis points to 2.39 percent. They have declined three basis points this week.

Declines in yields were tempered by data that showed factory production increased in July at the fastest pace in five months. The 1 percent gain at manufacturers followed a 0.3 percent increase in the prior month that was more than initially estimated, figures from the Federal Reserve in Washington showed.

Manufacturing in the region covered by the Federal Reserve Bank of New York expanded at a slower pace in August, a report showed today. The central bank’s Empire State Index fell to 14.7 from a four-year high of 25.6 in July. Readings greater than zero signal growth.

 
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