July 15, 2020 / 1:39 PM / 21 days ago

TREASURIES-Yield rise as COVID vaccine hopes boost risk appetite

    By Karen Brettell
    NEW YORK, July 15 (Reuters) - U.S. Treasury yields rose and
the yield curve steepened on Wednesday as hopes of a COVID-19
vaccine boosted risk appetite and reduced demand for safe-haven
    Moderna Inc's experimental vaccine for COVID-19
showed it was safe and provoked immune responses in all 45
healthy volunteers in an ongoing early-stage study, U.S.
researchers reported on Tuesday.
    “The market is trading fairly ‘risk on’ on vaccine hopes,”
said Gennadiy Goldberg, an interest rate strategist at TD
Securities in New York. “It’s largely COVID news driving the
price action recently.”
    Investors are wary about new economic damage as a sharp rise
in COVID infections in many U.S. states leads to new shutdowns
aimed at stemming the spread of the virus. 
    Benchmark 10-year notes rose three basis points
to 0.648%. They have held in a tight range from 0.569% to 0.784%
since mid-June.
    The yield curve between two-year and 10-year notes
 steepened two basis points to 48 basis points.
    Data on Wednesday showed that U.S. import prices increased
more than expected in June amid a surge in the cost of fuel, but
the overall trend remained weak, suggesting inflation could stay
tame despite a jump in consumer prices last month.
    Industrial output also rose 5.4% in June, while a New York
manufacturing index jumped more than expected in
    The next major economic focuses are jobless claims and
retail sales on Thursday.
      July 15 Wednesday 9:30AM New York / 1330 GMT
 US T BONDS SEP0               179-10/32    -0-31/32  
 10YR TNotes SEP0              139-52/256   -0-56/25  
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.145        0.1471    0.002
 Six-month bills               0.1475       0.1497    0.003
 Two-year note                 99-239/256   0.159     0.004
 Three-year note               99-208/256   0.1878    0.008
 Five-year note                99-192/256   0.3009    0.019
 Seven-year note               100-20/256   0.4886    0.028
 10-year note                  99-200/256   0.648     0.034
 20-year bond                  100-4/256    1.1241    0.045
 30-year bond                  97-164/256   1.3463    0.045
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         7.00         0.50    
 U.S. 3-year dollar swap         5.00         0.50    
 U.S. 5-year dollar swap         3.50         0.25    
 U.S. 10-year dollar swap       -2.50         0.00    
 U.S. 30-year dollar swap      -47.00         0.00    

 (Reporting by Karen Brettell; editing by Jonathan Oatis)
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