The FINANCIAL — U.S. Treasurys held on to existing gains Monday after a report showed Americans spent a little more cautiously last month, though incomes increased a bit more than expected.
Consumer spending had helped prop up growth in the first quarter, and Monday's report–showing a smaller increase in March spending than expected–feeds into concerns that the U.S. recovery could stall in the spring. Recent data have been markedly less upbeat, and much of this week's focus will be on the April payrolls report due Friday.
Helping the Treasurys market maintain its gains, the core personal-consumption-expenditures index rose an as-expected 0.2% in March from February.
Safe-haven Treasury prices stayed at a session high after the release, with benchmark 10-year notes up 5/32 to yield 1.914%. The 30-year bond gained 12/32 to yield 3.097%, while two-year notes remained flat in price to yield 0.262%. Debt prices move inversely to yields.
According to Borsa Italiana – London Stock Exchange Group, most of these gains were established in European trading hours, when economic readings there fueled concerns about a broad slowdown in global growth.
Spain showed it is officially in recession, posting a 0.3% contraction for the first quarter. Standard & Poor's earlier Monday downgraded 11 of the country's banks, including Banco Santander SA (SAN.MC, STD) and Banco Bilbao Vizcaya Argentaria SA (BBVA.MC, BBVA). Germany, which has been a pillar of growth for its region's bloc, reported retail sales in March increased slower than expected.
Month-end buyers squaring up their portfolios also are lending the Treasurys market some support.