Treasuries and Euro

U.S. Treasuries fell, pushing two-year yields to the highest level in a week, as a bigger-than-forecast increase in a measure of retail sales bolstered speculation the Federal Reserve will keep interest rates unchanged next month. Two-year notes led declines as traders bet the Fed's seven rate cuts since September will help the economy emerge from the biggest housing slump since the Great Depression. Import prices rose more than expected last month as the dollar set a record low against the euro.

The yield on the 30-year bond rose 7 basis points to 4.61 percent as oil reached $126.98 a barrel, a record high. Excluding autos, retail sales increased 0.5 percent in April, after a 0.4 percent climb in March, the government said. Futures on the Chicago Board of Trade show a 92 percent chance the Fed will hold its target lending rate at 2 percent on June 25, up from an 86 percent likelihood yesterday. The balance of bets is for a cut of a quarter-percentage point. Traders also see a 43 percent chance the central bank will lift the benchmark rate to 2.25 percent by year-end.

SP 500 daily May 12 after hours

we have a few areas of confluence on the horizon. It looks like we might test a little higher to the 24 to 27 range and dependant on volume we could see a push to 1441. This would hit the 200 day moving average and also be a fibonacci retracement.

We shall see. If we get a lower high from here we will test the next level down.

Treasuries and Crude

Ten-year Treasuries rose before a government report tomorrow that may show retail sales in the U.S. fell last month, underscoring that the economy may be slow to improve.

Notes also advanced on speculation investors will use coupon payments this week to add to bond holdings after the government's quarterly sales of $21 billion in debt last week. Yields on 30- year bonds, among the most sensitive to inflation expectations, touched the lowest in more than a week as crude oil fell for the first day in seven. Retail sales probably fell 0.2 percent in April, following a 0.2 percent advance in March.