By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices extended gains Friday
after a report on durable goods showed weak underlying components,
pushing benchmark yields lower for their third consecutive
week.
The 10-year note (10_YEAR) yield, which falls a prices rise, was
down 4 basis points on the day at 2.467%, according to Tradeweb.
The yield was down 1.5 basis points on the week, despite a sharp
rise in the previous session.
Here are the geopolitical and economic headlines that helped
push investors into Treasurys on Friday:
* Durable goods orders rose a stronger-than-expected 0.7% in
June, a sign that business spending on big-ticket items is rising.
Despite the strong headline number, some of the components of the
report were weak, including capital goods interest and core
shipments, according to David Ader, head of government bond
strategy at CRT Capital Group LLC.
* U.S. officials accused Russia of firing artillery over the
border into Ukraine, based on it U.S. intelligence. That represents
an increasingly strong stance. Geopolitical tremors from the
conflict in Ukraine continue to push investors into Treasurys.
* Investors shunned riskier assets like stocks in favor of haven
assets like Treasurys. Stocks fell while gold rose.
The 30-year bond (30_YEAR) yield fell 6 basis points to 3.238%
while the 5-year note (5_YEAR) yield fell 2.5 basis points to
1.675%.
Investors will look ahead to next week, which is packed with
potentially market-moving events that could help market
participants gauge how fast the economy is improving, and what that
means for the normalization of Federal Reserve monetary policy:
* The first reading on second-quarter GDP on Wednesday, which
follows a sharp contraction in growth during the unusually cold
first quarter.
* Federal Reserve meeting statement on Wednesday, which comes as
the central bank remains committed to low-rate policies.
* Nonfarm payrolls report on Friday, where investors will see if
improvement in the labor market is passing through to growth in
employee earnings.
* Treasury Department sells $29 billion of 2-year notes on
Monday, $35 billion of 5-year notes on Tuesday, and $29 billion of
7-year notes on Wednesday.
A solid jobs report could put pressure on the Fed to consider
raising key lending rates sooner.
"We had a strong employment number at the beginning of this
month. A directional message may begin if we are able to string
together a few -- two or three -- employment numbers," said
Dominick D'Eramo, chief fixed income officer at Wilmington
Trust.
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