- Jackson Hole conference watched for monetary policy clues
- ECB's Draghi to speak on Wednesday
U.S. Treasuries were steady on Monday as investors awaited speeches by top global central bankers later this week for further signals about monetary policy, with no major data releases to set market direction.
Investors were focused on this week’s annual central banking conference in Jackson Hole, Wyoming, which begins on Thursday. Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are due to speak at the conference.
Draghi, who will also speak at an event in Germany on Wednesday, will be the main focus as investors watch for any indications that the ECB may begin paring asset purchases.
“Are they going to try to pare back asset purchases, what their thinking is on inflation,” are among the main questions, said Subadra Rajappa, head of U.S. interest rate strategy at Societe Generale in New York.
Yellen’s speech on Friday will center on financial stability and is seen as less likely to provide clues on the Fed’s balance sheet plans.
Many analysts and investors expect the U.S. central bank will announce a plan to reduce its balance sheet at its September policy meeting.
Treasury yields fell to almost two-month lows on Friday as the continued shakeup and infighting at the White House reduced expectations that lawmakers will pass fiscal measures aimed at boosting growth.
U.S. President Donald Trump on Friday fired his chief strategist Steve Bannon in the latest White House personnel change.
Many investors were seen as reluctant to buy Treasuries at relatively low yields, however, which kept a cap on the bond rally.
“Yields have refused to meaningfully rally,” Rajappa said. “I think the market’s resisting going mass long at these levels because everything looks very rich.”
Benchmark 10-year notes gained 4/32 in price to yield 2.18 percent, down from 2.19 percent on Friday.