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US Treasury yields rise on retail sales data

By Rodrigo Campos

NEW YORK, Sept 16 (Reuters) – US government bond yields rose on Thursday after a surprisingly strong reading on retail sales cleared some concerns about growth in the world’s largest economy.

* The unexpected rebound in retail sales, supported by stronger online purchases, collides with recent downgrades in estimates of Gross Domestic Product for the current quarter, which have kept returns under pressure.

* The upward movement in the 10-year paper yield, which hit a one-week high of 1.351%, offsets the early-week declines, which occurred after lower inflation readings, and leaves the benchmark return almost unchanged from last Friday.

* “It’s a bit of a realignment of growth expectations, which is generally seen as a positive sign,” said Subadra Rajappa, head of US rate strategy at Societe Generale.

* The yield on 10-year Treasury debt was up 2 basis points at 1.324%, while the return on 30-year paper was up 0.8 basis points at 1.877%.

* The yield spread between 2- and 10-year stocks stood at 110.4 basis points, close to the midpoint of this week’s range.

* The return on 2-year paper, which normally moves in line with interest rate expectations, rose 0.6 basis points to 0.219%.

(Reporting by Rodrigo Campos; additional reporting by Lucia Mutikani; Edited in Spanish by Janisse Huambachano)

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