April 28, 2020 / 2:22 PM / a month ago

TREASURIES-Yields fall in range-bound trading

    CHICAGO, April 28 (Reuters) - U.S. Treasury yields fell on
Tuesday as the market reversed direction from Monday's uptick in
yields and traders looked for stronger signs of the economy's
path through the COVID-19 pandemic.
    The benchmark 10-year yield was last down 2.2
basis points at 0.6318%.
    "The market's just erasing some of yesterday's
underperformance," said Justin Lederer, Treasury analyst at
Cantor Fitzgerald in New York, referring to Monday's rise in
yields despite strong note auctions.
    He added that the market is range-bound despite the surge of
supply heading its way as the U.S. government finances costly
stimulus measures aimed at combating the fallout of the
coronavirus outbreak.
    "We go up a few days, we go down. We steepen. We flatten.
But net net it's kind of been just hovering around these levels
even with increased supply and the (Federal Reserve) tapering
purchases," Lederer said. 
    The Fed is slowly reducing its purchases of Treasuries to an
average of $15 billion per day last week from a peak of $75
billion per day from March 19 to April 1.
    After a strong showing for the sale of $42 billion of
two-year and $43 billion of five-year notes on Monday, the U.S.
Treasury will offer $35 billion of seven-year notes on Tuesday. 
    Meanwhile, the Fed begins its two-day policy meeting on
    The central bank could begin to clarify how long it intends
to leave rates near zero and could offer a glimpse of how the
policy-setting Federal Open Market Committee feels the economy
will evolve.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was last down 2.9
basis points to 0.2013%.
    In repurchase agreement (repo) operations, no bids were
submitted for an overnight operation, according to the New York
Federal Reserve's website.
April 28 Tuesday 8:56AM New York / 1356 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.1125       0.1144    -0.013
 Six-month bills               0.15         0.1522    -0.008
 Two-year note                 99-217/256   0.2013    -0.029
 Three-year note               99-246/256   0.2633    -0.027
 Five-year note                99-250/256   0.3797    -0.027
 Seven-year note               100-156/256  0.5352    -0.023
 10-year note                  108-60/256   0.6318    -0.022
 30-year bond                  119-52/256   1.2284    -0.021
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap        15.00         0.00    
 U.S. 3-year dollar swap         9.00         0.50    
 U.S. 5-year dollar swap         6.00         0.00    
 U.S. 10-year dollar swap        1.75         0.25    
 U.S. 30-year dollar swap      -43.25         0.25    
 (Reporting by Karen Pierog in Chicago; Editing by Sandra Maler)
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