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TREASURIES-Yields fall on lack of detail over Trump's pro-growth plans
February 6, 2017 / 4:32 PM / 8 months ago

TREASURIES-Yields fall on lack of detail over Trump's pro-growth plans

* Most U.S. yields hit lowest in at least 13 days
    * Uncertainty surrounding Trump policies spurs safety buying
    * Bund yields fall, driving demand for Treasuries

    By Sam Forgione
    NEW YORK, Feb 6 (Reuters) - U.S. short- and medium-dated
Treasury yields hit their lowest levels in at least 13 days on
Monday on mounting European political uncertainty and a dearth
of information on U.S. President Donald Trump's promised
pro-growth policies.
    With Trump's promises to cut corporate taxes and boost
infrastructure spending yet to be fleshed out, analysts said the
risk was increasing that the plans would fade further into the
background or that the initiative to enact them would weaken
over time. 
    A growing concern is that Trump's tax and spending plans
have taken a back seat to other issues such as his temporary
immigration ban, spurring demand for safe-haven Treasuries,
analysts say. 
    Benchmark 10-year Treasury yields touched 2.415 percent,
their lowest level since Jan. 24. U.S. two-, five-, and
seven-year yields also fell to their lowest since that date to
1.169 percent, 1.860 percent, and 2.194 percent. U.S. three-year
yields touched 1.421 percent, their lowest in two weeks. 
    U.S. 30-year Treasuries prices briefly rose by
more than a full point as their yields touched a session low of
3.050 percent.  
    "It's just people taking a pause here in their anticipation
of a quick economic success under Trump and trying to anticipate
how much the volatility of the administration is going to hurt
investment," said Lou Brien, a market strategist at DRW Trading
in Chicago, in reference to the drop in Treasury yields. 
    A decline in German Bund yields on a cloudier political
panorama in Europe helped stoke demand for U.S. debt, said John
Briggs, head of strategy for the Americas at NatWest Markets. 
    France's far-right party leader Marine Le Pen launched her
bid for the presidency on Sunday with a vow to fight deregulated
globalization and to take France out of the euro, leading French
government bond yields to briefly hit their
highest since September 2015 of 1.137 percent and 10-year Bund
yields to hit a two-week low of 0.360 percent.
 
    Treasury yields edged off their lows later in the morning
session. Benchmark 10-year Treasuries were last up
14/32 in price to yield 2.439 percent, while two-year notes
 were last up 2/32 in price to yield 1.173 percent.
U.S. 30-year bonds last yielded 3.075 percent. 
    The U.S. Treasury will sell $24 billion in three-year notes
Tuesday, $23 billion in 10-year notes Wednesday, and $15 billion
in 30-year bonds Thursday. 
    
February 6 Monday 10:44AM New York / 1544 GMT
                               Price                  
 US T BONDS MAR7               151          0-31/32   
 10YR TNotes MAR7              124-192/256  0-120/25  
                                            6         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.5025       0.5101    0.005
 Six-month bills               0.6225       0.6331    0.000
 Two-year note                 99-232/256   1.173     -0.036
 Three-year note               99-216/256   1.4294    -0.049
 Five-year note                100          1.875     -0.058
 Seven-year note               100-60/256   2.2135    -0.060
 10-year note                  96-52/256    2.439     -0.052
 30-year bond                  96-32/256    3.0745    -0.039
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        31.00         0.75    
 spread                                               
 U.S. 3-year dollar swap        25.25         0.75    
 spread                                               
 U.S. 5-year dollar swap         8.75         0.50    
 spread                                               
 U.S. 10-year dollar swap       -7.50         0.75    
 spread                                               
 U.S. 30-year dollar swap      -41.00         0.75    
 spread                                               
 
 (Reporting by Sam Forgione Editing by W Simon)

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