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Bonds News

TREASURIES-Longer-dated yields rise after falling to three-week lows

 (Updates yields, adds analyst comments, weekly jobless claims
data)
    Nov 5 (Reuters) - Longer-dated U.S. Treasury yields bounced
slightly higher on Thursday after reaching three-week lows
earlier in the session on post-election volatility.  
    The benchmark 10-year yield, which touched its
lowest level since mid-October at 0.718%, was last at 0.7763%.
The 30-year bond yield also hit a three-week low of
1.48% and was last at 1.5498%.
    The uptick in yields could be due "to some profit-taking
after this very tense period," said Gennadiy Goldberg, an
interest rate strategist at TD Securities in New York.
    Treasury yields, which had climbed to multi-month highs on
Tuesday ahead of the U.S. election results, plummeted when
chances waned for a Democratic sweep, along with a massive
stimulus that had been priced into the market.
    Kathy Jones, chief fixed income strategist at the Schwab
Center for Financial Research in New York, said the market
continued to factor in results from Tuesday's election that
pointed to a divided national government and a smaller plan to
aid the coronavirus-hit economy.
    "There'll be less spending and less fiscal stimulus and that
means the (U.S. Federal Reserve) has to continue to keep rates
lower for longer and we'll get slower growth and less
inflation," she said.
     Democrat Joe Biden has moved closer to an election win over
Republican President Donald Trump, but his party is falling
short of expectations in congressional elections, with the
Senate looking increasingly likely to stay in the hands of
Republicans, who were more likely to opt for a smaller aid
package than that favored by Democrats.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes flattened to mid-October levels at 56.90
basis points earlier in the session. It was last up less than a
basis point at 62.10 basis points. It had widened to as much as
77 basis points on Wednesday.     
    Later on Thursday, the Fed wraps up its two-day policy
meeting.
    With the final result of Tuesday's presidential election
still uncertain, the central bank is expected to stick closely
to its last statement and repeat its pledge to do whatever it
can to help the economy through the coronavirus-triggered
recession.  
    "There's not a whole lot that seems likely to change with
this meeting," Jones said.   
    On the data front, the U.S. Labor Department reported
initial claims for state unemployment benefits totaled a
seasonally adjusted 751,000 for the week ended Oct. 31, compared
with 758,000 in the prior week. Economists polled by Reuters had
forecast 732,000 applications in the latest week.

November 5 Thursday 10:09AM New York / 1609 GMT
                               Price                  
 US T BONDS DEC0               174-11/32    -0-3/32   
 10YR TNotes DEC0              138-228/256  -0-24/25  
                                            6         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.09         0.0913    -0.003
 Six-month bills               0.095        0.0964    -0.005
 Two-year note                 99-243/256   0.1507    0.006
 Three-year note               99-210/256   0.1863    0.010
 Five-year note                99-154/256   0.3307    0.008
 Seven-year note               99-156/256   0.5571    0.009
 10-year note                  98-148/256   0.7763    0.008
 20-year bond                  96-168/256   1.3176    0.002
 30-year bond                  95-216/256   1.5498    0.001
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         8.25        -0.25    
 spread                                               
 U.S. 3-year dollar swap         8.00        -0.25    
 spread                                               
 U.S. 5-year dollar swap         6.50         0.00    
 spread                                               
 U.S. 10-year dollar swap        2.25         0.00    
 spread                                               
 U.S. 30-year dollar swap      -33.25        -0.25    
 spread (Reporting by Karen Pierog in Chicago; additional reporting by
Dhara Ranasinghe and Suajata Rao in London; Editing by Dan
Grebler)
  
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