CREDIT : Bond Prices Fall as Jittery Investors Await Key Data

Bond prices lost ground Monday after surging last week. Investor nervousness mounted at the start of a week that will see a meeting of the Federal Reserve’s policy-making arm and the release of key U.S. trade data.

The Treasury’s closely watched 30-year issue, which jumped about $16.25 on Friday, fell 25/32 point, or about $7.50 for every $1,000 in face value. Its yield, which moves inversely to its price, rose to 8.36% from 8.29% on Friday.

Analysts noted that a retreat was not unusual after the sharp run-up in bond prices, which advanced at a feverish pace late last week after a handful of government reports were released that indicated the economy may be slowing.

“This is the kind of lull after the storm,” said Ward McCarthy, chief financial economist at Merrill Lynch Capital Markets.

“There was some profit taking, and the market sometimes loses a little steam (after a strong advance), so there’s no particular significance to the selloff,” he said.

Market participants likely will be a bit nervous as the Fed’s Open Market Committee meets today and Wednesday behind closed doors.

The federal funds rate, the interest on overnight loans between banks, was quoted at 6.438%, down from 6.50% on Friday.