December 19, 2019 / 2:40 PM / a month ago

TREASURIES-U.S. Treasury yields steady on mixed economic signals

    By Ross Kerber
    BOSTON, Dec 19 (Reuters) - U.S. Treasury yields were steady
on Thursday as traders weighed mixed economic signals on recent
domestic labor market and business conditions against a largely
encouraging macroeconomic picture.
    The benchmark 10-year yield was up less than a
basis point at 1.9292% in morning trading, after rising as high
as 1.9520% earlier.
    Yields fell back after the U.S. Labor Department said the
number of Americans filing applications for unemployment
benefits dropped from more than a two-year high last week. While
the report pointed to sustained labor market strength, initial
claims for state unemployment benefits were higher than 
economists had forecast.
    The figures drew traders' attention away from more positive
long-term trends, said James Barnes, director of fixed income at
Bryn Mawr Trust.
    "The recent attention on trade and global central policy
shifted a little this morning" based on the jobs report, he
said.
    In a separate report on Thursday, the Philadelphia Federal
Reserve said its business conditions index dropped to a reading
of 0.3 in December from 10.4 in November. But there were
increases in measures of new orders, unfilled orders, factory
hours and shipments.
    Economic fundamentals look little changed, said Cantor
Fitzgerald treasury analyst Justin Lederer, with technical
factors likely driving many trades on Thursday. "Expectations
for the economy are not as dire as they were a few months ago,"
he said.
    Earlier in the day German 10-year bond yields rose to
six-month highs, as Sweden ended five years of negative interest
rates - reinforcing a sense in markets that major central banks
may be done with pushing borrowing costs further below
zero.
    The two-year yield, which typically moves in step
with interest rate expectations, was down less than a basis
point at 1.6268% in morning trading.
    
  December 19 Thursday 9:23AM New York / 1423 GMT
                               Price                  
                                                      
                                                      
                                                      
 Three-month bills             1.5325       1.564     0.005
 Six-month bills               1.5375       1.5753    0.000
 Two-year note                 99-194/256   1.6268    -0.006
 Three-year note               99-226/256   1.6654    -0.006
 Five-year note                98-224/256   1.7383    0.000
 Seven-year note               98-124/256   1.8586    0.003
 10-year note                  98-100/256   1.9292    0.005
 30-year bond                  100-76/256   2.3611    0.010
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         7.25         0.50    
 spread                                               
 U.S. 3-year dollar swap         2.50         0.50    
 spread                                               
 U.S. 5-year dollar swap        -1.00         0.00    
 spread                                               
 U.S. 10-year dollar swap       -5.25         0.00    
 spread                                               
 U.S. 30-year dollar swap      -30.00         0.00    
 spread                                               
 
 (Editing by David Gregorio)
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