July 10, 2018 / 1:43 PM / 13 days ago

TREASURIES-Yield curve flattest since 2007 ahead of auctions

    * 3-year note auction scheduled for 1 p.m. EDT (1700 GMT)
    * Long end of the U.S. yield curve flattest level since 2007

    By James Thorne
    NEW YORK, July 10 (Reuters) - The U.S. yield curve flattened
to its tightest spread since 2007 on Tuesday ahead of an
afternoon auction for 3-year notes.
    The Federal Reserve will sell $33 billion worth of 3-year
notes in an auction that will close at 1 p.m. EDT (1700 GMT) on
Tuesday. An additional $22 billion in 10-year notes is scheduled
for Wednesday and $14 billion in 30-year bonds will be offered
on Thursday.
    "Auctions have been going OK recently in spite of the
increases in size since February," said Thomas Simons, money
market economist at Jefferies & Co in New York. "But there's
always a concern that buy-side demand doesn't keep up."
    The portion of the yield curve between 5-year notes and
30-year bonds flattened to a low of 20.14 basis points, the
tightest spread in over a decade.
    Yields were up slightly across the board, with benchmark U.S
10-year note trading at 2.871 percent at 9:29 a.m.
EDT (1329 GMT), up 1 basis point from Monday's close.
    Job openings and labor turnover data for May were to be
released by the Bureau of Labor statistics at 10 a.m. EDT (1400
GMT).
    Analysts say the most important economic release of the week
will be Thursday's core consumer price index inflation data.
    
  July 10 Tuesday 9:29AM New York / 1329 GMT
                               Price                  
 US T BONDS SEP8               145-1/32     -3/32     
 10YR TNotes SEP8              120-8/256    -3/32     
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.95         1.987     0.003
 Six-month bills               2.1025       2.1546    0.000
 Two-year note                 99-220/256   2.5734    0.012
 Three-year note               99-220/256   2.6748    0.014
 Five-year note                99-90/256    2.7654    0.015
 Seven-year note               99-112/256   2.8394    0.012
 10-year note                  100-8/256    2.8711    0.011
 30-year bond                  103-8/256    2.971     0.005
         YIELD CURVE           Last (bps)   Net       
                                            Change    
                                            (bps)     
 10-year vs 2-year yield       29.60        0.00      
 30-year vs 5-year yield       20.50        -0.95     
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        25.25         0.25    
 spread                                               
 U.S. 3-year dollar swap        21.25         0.25    
 spread                                               
 U.S. 5-year dollar swap        14.25        -0.50    
 spread                                               
 U.S. 10-year dollar swap        7.25        -0.50    
 spread                                               
 U.S. 30-year dollar swap       -3.50         0.00    
 spread                                               
 


    

    

    
 (Reporting by James Thorne; editing by Jonathan Oatis)
  
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