April 4, 2019 / 2:01 PM / 2 months ago

TREASURIES-U.S. yields little changed, traders await U.S.-China talks progress

    * Traders on edge over latest round of U.S.-China trade
    * U.S. jobless claims fall to 49-year low last week
    * U.S. to announce 3-year, 10-year, 30-year auction details
    * Fed's Mester, Harker to speak at banking conference at 1

 (Updates market action, adds quote, table)
    By Richard Leong
    NEW YORK, April 4 (Reuters) - U.S. Treasury yields were
little changed on Thursday, hovering at 1-1/2 week highs as
traders awaited a possible breakthrough in the latest round of
trade negotiations between China and the United States.
    A deal between the world's two biggest economies would
remove a concern that has been hanging over financial markets
since the two nations imposed tariffs on each other last year. 
    President Donald Trump will meet Vice Premier Liu He, who is
leading the Chinese side, in the talks at the Oval Office at
4:30 p.m. (2030 GMT), the White House said.
    "The operative question at this moment in the Treasury
market is whether or not any deal eventually reached between
Trump and China will be sufficient to reverse the titanic shift
which has already occurred on the international trade front,"
BMO interest rates strategists wrote in a research note.
    Global bond yields have risen this week on encouraging
economic data, in particular from China.
    Data on the United States and Europe, on the other hand,
have been mixed, stoking worries over a global economic
    Earlier Thursday, German industrial orders recorded their
steepest decline in over two years in February, while U.S.
jobless claims fell to a 49-year low last week.

    At 9:54 a.m. (1354 GMT), the yields on benchmark 10-year
Treasury notes were 2.519 percent, little changed
from Wednesday. They hit a 1-1/2 week peak of 2.528% in the
previous session.
    On the supply front, the U.S. Treasury Department will
announce details on its sales of three-year, 10-year and 30-year
bonds next week at 11 a.m. (1500 GMT).

    Meanwhile, Philadelphia Federal Reserve President Patrick
Harker and Cleveland Fed chief Loretta Mester will speak about
the economy at separate events at 1 p.m. (1700 GMT). Neither are
voting members of the Federal Open Market Committee in
April 4 Thursday 9:55AM New York / 1355 GMT
 US T BONDS JUN9               147-17/32    1/32      
 10YR TNotes JUN9              123-124/256  -1/32     
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             2.385        2.4328    -0.004
 Six-month bills               2.385        2.4542    0.000
 Two-year note                 99-212/256   2.339     0.006
 Three-year note               100-56/256   2.2974    0.005
 Five-year note                99-18/256    2.3235    0.003
 Seven-year note               98-240/256   2.4162    0.000
 10-year note                  100-236/256  2.5187    0.002
 30-year bond                  101-100/256  2.9297    0.001
         YIELD CURVE           Last (bps)   Net       
 10-year vs 2-year yield       17.80        -0.60     
 30-year vs 5-year yield       60.50        0.00      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap        10.50        -0.50    
 U.S. 3-year dollar swap         7.50        -0.25    
 U.S. 5-year dollar swap         3.50        -0.25    
 U.S. 10-year dollar swap       -2.50        -0.25    
 U.S. 30-year dollar swap      -26.00        -0.25    


 (Reporting by Richard Leong; Editing by Bernadette Baum)
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