(Updates market activity, adds analyst comment) By Ross Kerber Aug 24 (Reuters) - Stable U.S. Treasury yields on Monday showed traders preparing for a week that will include of a barrage of new supply and possible insight from the Federal Reserve on how it will support the economy. The benchmark 10-year yield was up less than a basis point at 0.6493% in afternoon trading. The yield was roughly in the middle of the range where the 10-year note has traded since late March and indicated investors were looking ahead to auctions of $148 billion worth of 2-year, 5-year and 7-year notes starting on Tuesday said Ben Jeffery, BMO Capital Markets rates strategist. Remarks from Federal Reserve Chairman Jerome Powell scheduled for Thursday could shed light on the U.S. central bank's next steps to promote an economic recovery. "People are probably just squaring positions ahead of the more consequential events later this week," Jeffery said. Jack McIntyre, fixed income portfolio manager for Brandywine Global Investment Management, said despite the upcoming auctions, U.S. Treasury yields will likely stay close to current levels until the Fed provides more clarity about its intentions. "My view is that the supply doesn't change the trend in the bond market. I think yields are going to be rangebound," he said. U.S. Republicans formally backed President Donald Trump's re-election bid on the first of four days of a scaled-back party convention in Charlotte, North Carolina. Party members are meeting amid a coronavirus pandemic that has killed more than 176,000 Americans, erased millions of jobs and eroded the president's standing among voters. Wall Street gained on Monday, setting the S&P 500 and the Nasdaq on track for record closing highs as optimism over potential medical advances to fight the pandemic helped keep investors in a buying mood. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 49 basis points, a basis point above Friday's close and well above its recent low of 33 basis points reached on July 24. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up less than a basis point at 0.1554% in afternoon trading. August 24 Monday 2:22PM New York / 1822 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0925 0.0938 -0.002 Six-month bills 0.115 0.1167 -0.002 Two-year note 99-241/256 0.1554 0.008 Three-year note 99-216/256 0.1777 0.011 Five-year note 99-218/256 0.2803 0.008 Seven-year note 99-104/256 0.4621 0.007 10-year note 99-196/256 0.6493 0.009 20-year bond 99-204/256 1.1364 0.005 30-year bond 100-140/256 1.3527 0.000 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.50 -0.75 spread U.S. 3-year dollar swap 5.75 -0.75 spread U.S. 5-year dollar swap 4.25 -0.75 spread U.S. 10-year dollar swap -1.25 -1.00 spread U.S. 30-year dollar swap -38.25 -0.25 spread (Reporting by Ross Kerber in Boston; Editing by Will Dunham and Leslie Adler)
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