Treasuries moved higher for a third day as reports showed retail sales bolstered less than predicted and consumer confidence slumped more than estimated, suggesting the economic development is struggling to gain momentum. The combination added to speculation that the Federal Reserve may be less aggressive than some investors anticipated in slowing its bond-purchasing program when policy makers meet Sept. 17-18. Yields advanced last week to the highest since July 2011 before a report showed employment advances in August are under prediction. Rates on six-month bills slid to the worst point since October 2011. Futures Reversal Hedge-fund managers and other large speculators reversed bets on 30-year bond futures in the week ending Sept. 10, according to U.S. Commodity Futures Trading Commission data. Confidence Drops Retail sales rose in August 0.2 percent, the least in four months, following a revised 0.4 percent July gain that was bigger than previously estimated, the Commerce Department reported. The median forecast of economists surveyed by Bloomberg called for a 0.5 percent advance. Won’t ’Disappoint’ The Fed bought $3.7 billion today of Treasuries maturing from June 2019 to June 2020 as part of its stimulus effort. Higher Demand Demand for U.S. government debt increased this week at the auctions of $65 billion of U.S. notes and bonds. The $13 billion of 30-year debt sold yesterday attracted bids valued at 2.4 times the amount offered, versus 2.11 last month. The bid-to-cover ratio rose to 2.86 at the $21 billion offering of 10-year notes on Sept. 11, from 2.45 last month, while the three-year note sale on Sept. 10 had the ratio rise to 3.29 from 3.21. Chairman Speculation Treasuries fell earlier as the Nikkei said former U.S. Treasury Secretary Lawrence Summers will be the next Fed chairman. A White House spokesman said later President Barack Obama has made no decision on who will succeed Ben S. Bernanke, whose term as chairman ends in January. Thirty-five percent of investors, analysts and traders who are Bloomberg subscribers say Summers may provide less stimulus than Bernanke, compared with 13 percent who see Summers with looser policy and 22 percent saying it’d be the same. Forty-seven percent see current Vice Chairman Janet Yellen presiding over the same policy if she succeeds Bernanke, with 17 percent saying it’d be looser and 8 percent saying tighter. The survey was conducted on Sept. 10.
