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TREASURIES-Prices flat as investors consolidate positions; tax reform in focus
April 26, 2017 / 2:55 PM / in 6 months

TREASURIES-Prices flat as investors consolidate positions; tax reform in focus

    By Gertrude Chavez-Dreyfuss
    NEW YORK, April 26 (Reuters) - U.S. Treasury prices were
little changed on Wednesday after paring steep losses sustained
in the last few sessions, as investors looked to President
Donald Trump's announcement on tax reform later in the day, with
some market participants remaining skeptical that it can get
done.
    However yields, which move inversely to prices, continued at
two-week highs across the curve for a third straight session.
    All week, details of the tax overhaul package have come out
and so the positive surprise element from the announcement has
been diminished.
    On Wednesday, administration officials said Trump will
release a tax plan that proposes to slash business taxes and
steeply discount the rate on corporate profits brought back into
the United States.             
    Investors are now focused on whether these reforms would
push through especially in the wake of the earlier debacle on
healthcare legislation. 
    "Yesterday afternoon, the broad strokes of the tax reform
have been leaked so I don't think there's a ton new from
(Treasury Secretary Steven Mnuchin) this afternoon, but there's
always a chance," said Guy Lebas, chief fixed income strategist
at Janney Montgomery Scott LLC in Philadelphia.
    "There's no guarantee though that this gets down. The market
has a certain degree of skepticism."
    The market is also awaiting a $34 billion U.S. 5-year note
auction.
    Aaron Kohli, rates strategist at BMO Capital Markets in New
York, said the auction could fetch a yield slightly higher than
expected given that the note has become relatively expensive
heading into the sale.
    "On the positive side, flows into the sector are at the
upper end of recent ranges and the unwinding of Trumponomics has
provided some reasons to own the belly in the longer run," he
added. 
    In mid-morning trading, benchmark 10-year notes            
were flat in price to yield 2.328 percent, compared with 2.329 
percent late on Tuesday. Yields hit a fresh two-week high of
2.35 percent earlier.
    U.S. 30-year bond             prices were slightly up in
price, yielding 2.977 percent, down from Monday's 2.979 percent.
    On the front end, U.S. two-year yields were at 1.285 percent
          , from Monday's 1.286 percent.
    Ahead of the auction, U.S. five-year notes yielded 1.853
percent           , little changes from 1.85 percent late on
Monday.

 (Editing by James Dalgleish)
  
 
 

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