October 18, 2018 / 3:01 PM / a month ago

TREASURIES-U.S. yields rise on worries about Fed rate hikes

    * FOMC Sept minutes hint at further U.S. rate increases
    * U.S. Treasury to sell $5 bln 30-year TIPS at 1 p.m. 

 (Updates market action, adds quote)
    By Richard Leong
    NEW YORK, Oct 18 (Reuters) - U.S. Treasury yields climbed on
Thursday, with the 10-year yield hitting a one-week high on
worries about the number of interest rate increases from the
Federal Reserve as policy-makers expressed confidence about the
durability of the U.S. expansion.
    On Wednesday, the Fed released the minutes from its Sept.
25-26 policy meeting, when central bank officials agreed to
increase key borrowing costs by a quarter point to 2.00-2.25
percent. 
    The minutes suggested they assessed the pace of economic
growth might be strong enough to raise rates more than what some
traders had thought.
    "On the margin, they were more hawkish than expected," said
Jason Celente, senior portfolio manager at Insight Investment in
New York.
    Fed policy-makers' optimistic view was supported by data on
Thursday that showed the number of Americans on jobless rolls
fell to levels last seen in 1973, suggesting a further
tightening in the labor market.
    Moreover, the failure of bond yields to break into lower
levels earlier this week likely caused some traders to reduce
their Treasuries positions, Celente said.
    At 10:42 a.m. (1442 GMT), the benchmark 10-year Treasury
yield was 3.201 percent, up 3 basis points from late
Wednesday.
    The 30-year yield was 3.371 percent, up 3 basis
points from late Wednesday.
    On the supply front, the Treasury Department will announce
its offering of two-year, five-year and seven-year fixed-rate
government debt supply next week. 
    At 1 p.m. (1300 GMT), the Treasury is scheduled to sell $5
billion in 30-year Treasury Inflation Protected Securities
.
    October 18 Thursday 10:43AM EDT/ 1443 GMT
                               Price                   
 US T BONDS DEC8               137-22/32    -0-15/32   
 10YR TNotes DEC8              117-220/256  -0-48/256  
                               Price        Current    Net
                                            Yield %    Change
                                                       (bps)
 Three-month bills             2.2675       2.3121     0.002
 Six-month bills               2.405        2.4682     0.002
 Two-year note                 99-182/256   2.9032     0.021
 Three-year note               99-170/256   2.9932     0.022
 Five-year note                99-36/256    3.0633     0.022
 Seven-year note               99-16/256    3.1511     0.025
 10-year note                  97-56/256    3.207      0.028
 30-year bond                  92-236/256   3.3783     0.032
                                                       
   DOLLAR SWAP SPREADS                                 
                               Last (bps)   Net        
                                            Change     
                                            (bps)      
 U.S. 2-year dollar swap        21.50         1.50     
 spread                                                
 U.S. 3-year dollar swap        19.00         1.25     
 spread                                                
 U.S. 5-year dollar swap        14.25         1.25     
 spread                                                
 U.S. 10-year dollar swap        6.50         0.75     
 spread                                                
 U.S. 30-year dollar swap       -7.75         0.75     
 spread                                                
 

    
 (Reporting by Richard Leong; Editing by Dan Grebler)
  
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