(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)
Our Standards: The Thomson Reuters Trust Principles.