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Oil prices fall while demand for U.S. Treasuries stays strong

Reuters  |  NEW YORK 

By Nick Brown

(Reuters) - Investor concerns about rising U.S. sent crude prices down on Monday, but investors stayed bullish on U.S. Treasuries despite an increased supply of three- and 10-year notes.

U.S. Stocks closed mixed, with the and ending in the red, while the added about 28 points.

weighed increased U.S. supply against the likelihood that the Organization of the Petroleum Exporting Countries (OPEC) will maintain supply cuts that have been in effect more than a year.

"The market continues to flip back and forth on the idea that increased global demand and a production cut is going to support prices," said Gene McGillian, director of at

U.S. crude was last at $61.37, down 1.08 percent. Brent was last at $64.96, down 0.81 percent on the day. During the session, U.S. crude fell as much as 2.21 percent. Some of that early slide was probably profit-taking after a rise on Friday, said Jim Ritterbusch, of firm

On Friday, crude prices rose after U.S. data showed the in February added the most jobs in more than 1-1/2 years. The payroll data also supported Treasuries.

On Monday, benchmark 10-year notes last rose 8/32 in price to yield 2.8663 percent, hovering near multi-year highs.

The Treasury on Monday sold $28 billion of three-year notes and $21 billion of the 10-year notes, in what called an "on-the-screws type auction."

Increased supply did not quell demand for the debt, a positive sign for the heavy issuance expected in the year ahead.

"Nothing really stood out," said Goncalves, at in "You can consider that a good thing, given this year will see more and more Treasuries issued."

U.S. stocks closed mixed. The <.DJI> fell 157.13 points, or 0.62 percent, to 25,178.61, the <.SPX> lost 3.55 points, or 0.13 percent, to 2,783.02 and the <.IXIC> added 27.52 points, or 0.36 percent, to 7,588.33.

Anwiti Bahuguna, a at Columbia in Boston, pointed to after-effects of Friday's employment report.

"We've seen stable, modest wage growth, nothing that should be considered harmful for equity markets," Bahuguna said. "It was a Goldilocks sort of report, and the market is still digesting it. What we're looking ahead to is the inflation report."

The broader trend remained positive for Wall Street's main indexes, which had closed up nearly 2 percent on Friday on the strength of the jobs report. They have nearly reversed declines in recent weeks as investors had begun to fear higher wages might lead to price pressures.

Last week's jobs data, as well as an easing of fears of a global trade war, also boosted stocks across many parts of the world.

MSCI's world equity index <.MIWD00000PUS> hit a two-week high on Monday, while Hong Kong's Hang Seng Index closed up 1.93 percent.

Emerging market stocks rose 1.24 percent.

In currencies, investors' appetite for riskier bets hurt the U.S. dollar. The dollar index <.DXY> fell 0.21 percent, with the euro up 0.27 percent to $1.2338.

The Japanese yen strengthened 0.37 percent versus the greenback to 106.39 per dollar, while sterling was last trading at $1.3906, up 0.40 percent on the day.

(Additional reporting by Kate Duguid, and Ayenat Mersie; Editing by Steve Orlofsky, and David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 02:39 IST