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TREASURIES-Yields rise on greater optimism for Trump's pro-growth plans
February 9, 2017 / 4:22 PM / 8 months ago

TREASURIES-Yields rise on greater optimism for Trump's pro-growth plans

* Trump says will make tax announcement in a few weeks
    * Yields climb from multi-week lows touched Wednesday
    * Traders prepare for $15 bln 30-year bond auction
    * Yields remain within recent ranges

    By Sam Forgione
    NEW YORK, Feb 9 (Reuters) - U.S. Treasury yields rose on
Thursday on greater optimism that U.S. President Donald Trump
would make progress on promised economic growth policies, while
anticipation of a $15 billion auction of long-dated U.S.
Treasury bonds also pushed yields higher. 
    Yields rose from multi-week lows touched Wednesday on
sentiment among traders that the U.S. government bond market may
have rallied too much in recent days. Yields had fallen
Wednesday as buyers bought Treasuries partly on pessimism that
Trump's fiscal spending and tax reform plans might not pan out
anytime soon. 
    Yields extended their climb late morning Thursday after
Trump said in a meeting with airline executives Thursday that he
would make a tax announcement in a few weeks. Benchmark 10-year
note yields touching a high of 2.382 percent after
hitting a more than three-week low of 2.325 percent Wednesday.
 
    The jump in yields "might have been a function of that, that
maybe some of (Trump's) fiscal and deregulatory and tax changes
might be coming to fruition," said Kim Rupert, managing director
for fixed income at Action Economics in San Francisco.
    Analysts said confidence in Trump's avowed policies, while
improved, was still somewhat shaky. As a result, yields remained
within recent ranges, with two- and three-year note yields
rising to their highest in just three days and yields on other
maturities remaining below or matching Wednesday's session
highs. 
    "We're going to sit here and we're going to try to read
between the lines about what's going on down there (in
Washington) and figure out what's actually going to happen,"
said Charles Comiskey, head of Treasuries trading at Bank of
Nova Scotia in New York.  
    Analysts said yields were also higher, and prices lower, in
anticipation of the Treasury's auction of 30-year bonds at 1
p.m. ET (1800 GMT). The auction comes after the Treasury sold
$24 billion in three-year notes Tuesday and $23 billion in
10-year notes Wednesday. 
    U.S. 30-year yields hit a session high of 3.007
percent after hitting a three-week low of 2.945 percent
Wednesday, while five-year yields hit a session high
of 1.857 percent after touching a two-month low of 1.794 percent
Wednesday. 
    U.S. two-year yields hit a session high of 1.181 percent,
while three-year yields hit a session high of 1.450 percent.
U.S. 10-year notes were last down 9/32 in price to yield 2.375
percent, from a yield of 2.340 percent late Wednesday.
    
February 9 Thursday 11:06AM New York / 1606 GMT
                               Price                  
 US T BONDS MAR7               152-14/32    -0-27/32  
 10YR TNotes MAR7              125-16/256   -0-76/25  
                                            6         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.5325       0.5406    -0.002
 Six-month bills               0.6225       0.6331    0.008
 Two-year note                 99-232/256   1.1732    0.016
 Three-year note               99-210/256   1.4364    0.018
 Five-year note                100-32/256   1.8485    0.033
 Seven-year note               100-124/256  2.1747    0.039
 10-year note                  98-224/256   2.3771    0.037
 30-year bond                  97-120/256   3.0041    0.043
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        30.75         0.25    
 spread                                               
 U.S. 3-year dollar swap        23.00         0.25    
 spread                                               
 U.S. 5-year dollar swap         8.50        -0.25    
 spread                                               
 U.S. 10-year dollar swap       -8.00         0.50    
 spread                                               
 U.S. 30-year dollar swap      -43.25        -0.50    
 spread                                               
 
 (Reporting by Sam Forgione)

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