June 9, 2017 / 3:03 PM / 9 months ago

TREASURIES -U.S. yields rise ahead of debt auction, Fed meeting next week

NEW YORK, June 9 (Reuters) - U.S. Treasury long-dated yields rose to one-week highs on Friday as investors consolidated positions ahead of next week’s government debt auctions and a widely expected interest rate increase by the Federal Reserve.

U.S. short-term yields also advanced, with two-year Treasuries touching a four-week peak.

Investors largely shrugged off Thursday’s results of the UK election, which resulted in a hung parliament for Britain, and scathing testimony from former Federal Bureau of Investigation director James Comey at the Senate.

Comey accused Trump of firing him to try to undermine the bureau’s investigation into possible collusion between his 2016 presidential campaign team and Russia.

U.S. Treasuries initially rallied in the aftermath of the UK election, with benchmark 10-year note yields dropping as low as 2.16 percent, but yields have since risen as part of an overall consolidation.

The UK’s Conservative Party lost its parliamentary majority in an election debacle days before talks on Britain’s EU departure are due to begin.

“Our key takeaway from the day’s events was that we saw the weakening in Treasuries as largely technical,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.

He said the sell-off in Treasuries suggested the market was preparing for a crowded U.S. auction calendar next week.

The U.S. Treasury will hold an auction of 3-, 10- and 30-year debt next week. Ahead of an auction, traders would typically sell Treasuries to make way for the new supply of government debt, leading to higher yields.

Investors were also anticipating another interest rate increase by the Fed on Wednesday, at the conclusion of a two-day monetary policy meeting.

In late morning trading, U.S. 10-year Treasuries were last down 9/32 in price, with yields at 2.225 percent, compared with 2.194 percent on Thursday. Ten-year yields earlier hit a one-week high of 2.228 percent.

U.S. 30-year bonds fell 16/32 in price, yielding 2.879 percent, rising from Thursday’s 2.855 percent. Earlier in the session, 30-year yields rose to one-week peaks of 2.883 percent.

On the front end of the curve, U.S. two-year yields were at 1.350 percent, up from 1.322 percent late on Thursday after hitting a four-week high of 1.351 percent. (Reporting by Gertrude Chavez-Dreyfuss; Editing by James Dalgleish)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below