Reuters logo
TREASURIES-Yields fall as Trump doubts continue to weigh
March 29, 2017 / 7:55 PM / 8 months ago

TREASURIES-Yields fall as Trump doubts continue to weigh

    * Several Fed officials see multiple rate hikes this year
    * U.S. seven-year note auction was stronger than expected

 (Adds comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, March 29 (Reuters) - U.S. Treasury debt yields
slid on Wednesday in generally light trading, pressured by
lingering uncertainty surrounding the Trump administration's
economic policy.
    After the legislative debacle last Friday when President
Donald Trump's fellow Republicans withdrew their own healthcare
bill, investors worried about other reforms on his economic
agenda that could get waylaid as well, such as taxes.
    "The ongoing political uncertainty and the whole Trump
agenda have led people to doubt about what would come out next
from the administration after the healthcare turmoil," said Kim
Rupert, managing director of global fixed income at Action
Economics in San Francisco.
    Treasury prices also got a lift from a
stronger-than-expected auction of U.S. seven-year notes. Bidding
for $28 billion of the seven-year notes was the strongest in
four months, resulting in a yield of 2.215 percent.
    The ratio of bids to the amount of seven-year debt offered
was 2.56, the highest since a ratio of 2.68 in November. This
measure of overall auction demand was 2.49 in February.
            
    Indirect bidders, consisting of foreign central banks,
accepted 71.1 percent, compared with 63.8 percent previously and
a 64.9 percent average.
    Yields picked up a little bit after Chicago Federal Reserve
President Charles Evans said on Wednesday he supports further
interest rate hikes this year given progress on the Fed's goals
of full employment and stable inflation. Evans, a voter on the
policy-setting Federal Open Market Committee, has been one of
the consistent proponents of low interest rates.              
    More comments from Fed officials supporting multiple rate
hikes, such as Boston Fed President Eric Rosengren and San
Francisco Fed President John Williams, had little impact on the
market as both officials are non-FOMC voters.             
            
    In late trading, benchmark 10-year notes             were up
7/32 in price to yield 2.383 percent, down from 2.409 percent on
Tuesday. 
    U.S. 30-year bond prices rose 14/32            , yielding
2.989 percent, down from Tuesday's 3.013 percent.
    On the front end of the curve, U.S. two-year yields were at
1.273 percent           , compared with 1.298 percent late on
Tuesday.
    The yield gap between shorter-dated and longer-dated
Treasuries has been on a flattening trend over the last two
weeks. But on Wednesday, the spread between the two-year and
10-year                steepened a little bit to 110.6 basis
points, from 111.20 basis points late on Tuesday.
    A flat yield curve is often a sign of a looming slowdown.

 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick
Zieminski and Leslie Adler)
  
 
 

Our Standards:The Thomson Reuters Trust Principles.
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