* Comey firing raises worries about Trump's economic agenda
* Treasuries bids diminish after poor 10-year note sale
* U.S. 10-year yield retests 5-week high
* Fed's Rosengren sees possibly three more rate hikes in
(Updates market action, adds quote)
By Richard Leong
NEW YORK, May 10 U.S. Treasury yields were
little changed on Wednesday as a weak 10-year note auction
offset concerns about a political storm over U.S. President
Donald Trump's firing of the FBI director that could hinder his
U.S. bond yields fell overnight in reaction to Trump's
abrupt dismissal of FBI Director James Comey late Tuesday. It
drew a storm of criticism, mostly from Democrats, that the move
was aimed at blunting the agency's probe into the Trump
presidential campaign's possible collusion with Russia to sway
last year's election.
The yield drop faded following below-average investor demand
at a $23 billion 10-year note sale, the second leg of $62
billion quarterly refunding supply this week with benchmark
yields retesting a five-week high reached on Tuesday.
"It's all taken in stride at this point," Bill Northey,
chief investment officer at the private client group of U.S.
Bank in Helena, Montana, said of Comey's firing. "This is about
the Fed and inflation levels."
Boston Fed President Eric Rosengren said on Wednesday the
central bank should raise rates three more times in 2017 and
start reducing its $4.5 trillion balance sheet.
Interest rates futures implied traders saw an 83 percent
chance that the Fed would raise its benchmark overnight rate by
a quarter of a percentage point to a range of 1.00 percent to
1.25 percent at its June 13-14 policy meeting,
compared with 88 percent on Tuesday, according to CME Group's
Earlier Wednesday, the Labor Department said U.S. import
prices grew 0.5 percent in April, which was above forecast and
marked a fifth straight month of increases.
Competition from a growing pipeline of higher-yielding
corporate bonds also put upward pressure on Treasury yields.
Companies have raised more than $23 billion with
investment-grade bonds so far this week, according to IFR, a
Thomson Reuters unit.
The benchmark 10-year Treasury yield touched
2.416 percent, a five-week high already struck on Tuesday. It
was last at 2.407 percent, little changed on the day.
The 30-year bond yield declined 1 basis point to
3.031 percent. It was below 3.047 percent set on Tuesday, which
was its highest level since March 31.
May 10 Wednesday 2:12PM New York / 1812 GMT
US T BONDS JUN7 150-20/32 -0-4/32
10YR TNotes JUN7 124-212/256 0
Price Current Net
Yield % Change
Three-month bills 0.885 0.8993 -0.016
Six-month bills 1.0175 1.037 0.003
Two-year note 99-204/256 1.3548 0.000
Three-year note 99-206/256 1.5669 -0.003
Five-year note 99-184/256 1.9346 0.000
Seven-year note 98-152/256 2.2188 0.000
10-year note 98-160/256 2.4087 0.002
30-year bond 99-80/256 3.0351 -0.004
DOLLAR SWAP SPREADS
Last (bps) Net
U.S. 2-year dollar swap 25.00 -2.00
U.S. 3-year dollar swap 20.25 -3.50
U.S. 5-year dollar swap 6.25 -1.75
U.S. 10-year dollar swap -8.75 -1.50
U.S. 30-year dollar swap -46.50 -1.25
(Reporting by Richard Leong; Editing by Nick Zieminski and