March 29, 2019 / 6:12 PM / 3 months ago

TREASURIES-Yields rise as improving risk appetite boosts stocks

 (Adds Fed speakers, Brexit, updates prices)
    * Stock markets rise into quarter-end
    * Consumer spending disappoints in January
    * Three-month, 10-year yield curve turns positive

    By Karen Brettell
    NEW YORK, March 29 (Reuters) - U.S. Treasury yields rose on
Friday as risk sentiment improved into quarter-end, boosting
stocks and reducing demand for safe haven bonds.
    Wall Street's main indexes were boosted by optimism over
trade talks between the United States and China.     
    “After days of letting stocks fall just for lack of a better
story we’re seeing some bidding into quarter-end, and that
reduces the enthusiasm to rush to buy Treasuries,” said Jim
Vogel, an interest rate strategist at FTN Financial in Memphis,
    Benchmark 10-year notes             fell 5/32 in price to
yield 2.405 percent, after dropping to 2.340 percent in
overnight trading on Thursday, the lowest since December 2017.
    The yields have fallen from 2.618 percent on March 20, when
the Federal Reserve dramatically abandoned projections for any
interest rate hikes this year.             
    The yield curve between three-month bills and 10-year notes
turned slightly positive, after being inverted for a week. 
    Analysts say that the yield curve inversion needs to persist
for at least a few weeks in order to be a probable indicator of
a recession, which may come one-to-two years later.
    Interest rate futures traders are now pricing in a 67
percent chance of a rate cut by December, according to the CME
Group's FedWatch Tool.
    Dallas Fed President Robert Kaplan said on Friday he is
awaiting more domestic economic data to help him make up his
mind whether the U.S. central bank needs to make any adjustments
to its current policy stance.             
    Fed Vice Chair Randal Quarles gave a bullish view of the
U.S. economy and said more rate increases may be needed if
recent positive trends in productivity and investment continue.
    Treasury prices briefly gave up some losses on Friday after
data showed that U.S. consumer spending, which accounts for more
than two-thirds of U.S. economic activity, rebounded less than
expected in January.
    Incomes also rose modestly in February, suggesting the
economy was fast losing momentum after growth slowed in the
fourth quarter.             
    Prices also gained briefly after UK lawmakers rejected Prime
Minister Theresa May's Brexit deal for a third time, sounding
its probable death knell and leaving Britain's withdrawal from
the European Union in turmoil on the very day it was supposed to
leave the bloc.             

 (Editing by Phil Berlowitz)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below