October 15, 2012–Treasuries declined for the first time in five days as a report showed retail sales exceeded forecasts, adding to signs the economy is recovering and damping demand for the safety of government debt.

Treasuries gained earlier after Bank of Israel Governor Stanley Fischer said the world is “awfully close” to a recession, as he backed the Federal Reserve’s increase in bond purchases. Treasury 10-year note yields rose as September retail sales registered broad-based gains, indicating household spending helped bolster economic growth last quarter.

“The data is across-the-board better than expected,” said Steven Ricchiuto, chief economist in New York at Mizuho Securities USA, Inc., one of 21 primary dealers that trade Treasuries with the Fed. “We’ve been in the same trading range for the last couple of weeks. We’ll remain in the same trading range, 1.65 percent to 1.75 percent.”

The benchmark 10-year note yield rose one basis points, or 0.01 percentage point, to 1.66 percent at 9:27 a.m. New York time, after dropping nine basis points last week, according to Bloomberg Bond Trader prices. The 1.625 percent security due in August 2022 fell 1/32, or 31 cents per $1,000 face value, to 99 21/32.

Retail sales in the U.S. rose 1.1 percent last month after a revised 1.2 percent increase the prior month that was the biggest since October 2010 and larger than previously reported, Commerce Department figures showed today in Washington. The median forecast of 77 economists surveyed by Bloomberg called for a 0.8 percent rise.

‘Profit-Taking’

“There is some profit-taking today” after the recent gains in the market, said Tom Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. “The market is still within a range in front of the presidential election.”…Read More>>

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