June 29, 2020 / 7:09 PM / 5 days ago

TREASURIES-Longer-term yields rise as risk appetite improves

 (Recasts, updates yields, adds analyst comments)
    By Karen Pierog
    CHICAGO, June 29 (Reuters) - U.S. Treasury yields on the
long end of curve edged higher on Monday as investors, hoping
for a stimulus-backed economic rebound, piled into stocks after
last week's sharp sell-off.  
    The benchmark 10-year yield was last up less
than a basis point at 0.6413%, while the 30-year yield
 rose 2.5 basis points to 1.397%.
    Kim Rupert, senior economist at Action Economics in San
Francisco, said the market was in part unwinding from last
week's safe-haven bid. She added that the yield curve was
steepening after some flattening in the prior week.
    "The Treasury market is just supported near-term because of
so much uncertainty over the (coronavirus) and what that's going
to do to the recovery with a number of states pausing reopening
policies," she said. 
    The global death toll from COVID-19 surpassed half a million
people on Sunday, according to a Reuters tally, with the United
States accounting for about one-quarter of all the deaths.
  
    Bill Merz, head of fixed income research at U.S. Bank Wealth
Management in Minneapolis, said he expected small changes for
long-term yields in line with risk preferences, noting that
Treasuries may be "one of the least interesting markets for the
rest of the year" due to the Federal Reserve's influence on the
short end of the curve. 
    "There's not many places to go in terms of yields in the
front end of the curve," he said. "They're going to be
relatively close to where they are now until the Fed decides
otherwise and that has a pretty powerful influence at the longer
end of the curve as well." 
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, viewed as an indicator of economic
expectations, was at 47.90 basis points, less than a basis point
higher than at Friday's close.
 June 29 Monday 1:47PM New York / 1847 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.135        0.1369    -0.008
 Six-month bills               0.165        0.1674    -0.003
 Two-year note                 99-237/256   0.1622    -0.006
 Three-year note               100-56/256   0.1758    -0.008
 Five-year note                99-210/256   0.2862    -0.011
 Seven-year note               100-38/256   0.4784    -0.006
 10-year note                  99-216/256   0.6413    0.003
 20-year bond                  99-84/256    1.1629    0.021
 30-year bond                  96-108/256   1.3969    0.025
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.50        -0.50    
 spread                                               
 U.S. 3-year dollar swap         5.50        -0.25    
 spread                                               
 U.S. 5-year dollar swap         3.50        -0.25    
 spread                                               
 U.S. 10-year dollar swap       -2.50        -1.00    
 spread                                               
 U.S. 30-year dollar swap      -50.00        -1.25    
 spread                                               
                                                      
 


  



 (Reporting by Karen Pierog in Chicago; Editing by Dan Grebler)
  
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