Treasuries Move Lower Despite Disappointing Retail Sales Data

By | October 15, 2018

After ending the previous session somewhat lower, treasuries saw some further disadvantage throughout the trading day on Monday.

Bond prices came under pressure early in the day and stayed in unfavorable area throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, increased by 2.2 basis indicate 3.163 percent.

The weakness amongst treasuries came although the Commerce Department released a report showing much weaker than expected U.S. retail sales growth in the month of September.

The Commerce Department said retail sales inched up by 0.1 percent in September, matching the uptick seen in August. Economic experts had anticipated retail sales to climb up by 0.5 percent.

Leaving out a rebound in car sales, retail sales edged down by 0.1 percent in September after increasing by a downwardly revised 0.2 percent in August.

Ex-auto sales had actually been expected to increase by 0.3 percent, matching the boost initially reported for the previous month.

The report stated closely seen core retail sales, which exclude cars, gasoline, constructing products and food services, climbed up by 0.5 percent in September after coming in unchanged in August.

“Overall, the current strength of underlying retail costs reflects the continued boost to earnings from the tax cuts enacted at the start of the year,” said Andrew Hunter, U.S. Financial Expert at Capital Economics.

He added, “That said, sales growth looks most likely to slow in the fourth quarter as that increase starts to fade, and we still expect a more significant slowdown in genuine usage development over the course of next year.”

A different report released by the Federal Reserve Bank of New york city showed the pace of growth in New york city production activity sped up by more than anticipated in the month of October.

The New York Fed stated its general service conditions index increased to 21.1 in October from 19.0 in September, with a favorable reading suggesting development in local manufacturing activity. Financial experts had expected the index to inch up to 20.0.

Looking ahead, trading on Tuesday may be impacted by response to reports on commercial production and homebuilder self-confidence.

The material has been provided by InstaForex Business – www.instaforex.com

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