US Treasuries gain despite solid retail sales report

Sales volumes grew by 0.9% month-on-month in March, to reach $441.4bn, according to the Department of Commerce.

Economists mean forecast had been for a rise of 1.1%.

“Today’s retail sales report was not entirely free of disappointments. But the main message is that the US recovery has started to bounce back in March after being restrained by inclement weather, Retail sales are the first major indicator to form the eagerly awaited “V”,” wrote Unicredit’s Dr. Harm Bandholz in reaction to the data.

The previous month’s drop was revised to -0.5%, up slightly from an initial estimate of -0.6%.

Sales of automobiles jumped 2.7% after a 2.1% slump in the prior month.

Sales of building materials increased 2.1% while those for clothing and from general merchandise stores increased by 1.2% and 0.6%, respectively.

Both automobiles and building materials are highly weather sensitive categories.

Gasoline sales surprised analysts by dropping 0.6% over the month despite the rise seen in prices at the pump.

Despite the above data as of 14:20 the US 10-year Treasury bond yield was lower by seven basis points to 1.87% after the IMF earlier downgraded to its forecast for US growth next year to 3.1% from a previously anticipated 3.6%.