Bonds Mixed Following Data

U.S. Treasuries were mixed Monday with the long bond leaning lower while the 10-year was little changed and the five-year outperformed as stocks and oil fell. Inflation concerns were pushed higher, adding drag to longer-dated issues while uncertainty stemming from changing U.S. immigration policies drew safe-haven bids. Participants anticipate choppy, technically driven activity ahead of event risk including further manufacturing data, the Federal Open Market Committee statement Wednesday and the employment report Friday.

The 30-year was recently 3.065% from a 3.049% low yield/high price overnight, early 3.09% and 3.06% close Friday. The 10-year recently traded 2.47% from 2.46% overnight and a 2.48% close, after hitting the lowest prices in a month Thursday. The five-year is near 1.923% from a recent 1.918% high and 1.94% Friday. The two-year is near 1.192% after a recent 1.1885% high and 1.212% close.

The curve trade is mixed with the spread between the two- and 10-year yields little changed to flatter near 1.26 plus from 1.27 Friday while the yield gap between the five- and 30-years has widened to a steeper 1.14 from 1.11 plus.

By Caroline Williams