December 20, 2019 / 8:38 PM / a month ago

UPDATE 1-TREASURIES-U.S. Treasury yields steady on growth, consumer spending reports

 (Adds details on stock markets, consumer sentiment, updates
market activity)
    By Ross Kerber
    BOSTON, Dec 20 (Reuters) - U.S. Treasury yields were steady
on Friday as investors took stock of relatively strong economic
growth and consumer spending reports.
    The benchmark 10-year yield was up less than a
basis point at 1.9153% in afternoon trading, after reaching as
high as 1.947%.
    Analysts pointed to a Commerce Department report showing
gross domestic product increased at a 2.1% annualized rate in
the third quarter, unrevised from the previous estimate. The
economy grew at a 2.0% pace in the second quarter.
    The report suggested a continuation of economic growth and
reinforced a sense of business momentum, said Stan Shipley,
macro research analyst at Evercore ISI. 
    "Stocks are up and oil is trending higher. People are
shifting their allocations, which became very defensive several
months ago on recession concerns. Now the odds of that are very
low," Shipley said.
    The S&P 500 hit a record high for a seventh straight
session on Friday, as continued optimism on resolving the
U.S.-China trade war and strength in domestic consumer spending
lifted sentiment.
    The Commerce Department's unrevised reading was in line with
economists' expectations, but consumer spending was stronger
than previously reported. There were also upgrades to business
spending on non-residential structures such as power
    Consumer spending is being supported by the lowest
unemployment rate in nearly half a century. But inflation stayed
tame last month and could remain so for a while. The University
of Michigan's survey of consumers showed households' one-year
inflation expectations fell in December to 2.3%, the lowest in
three years, from 2.5% in November.
    The two-year yield, which typically moves in step
with interest rate expectations, was up less than a basis point
to 1.6294% in afternoon trading.
    December 20 Friday 3:13PM New York / 2013 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             1.5475       1.5792    0.005
 Six-month bills               1.5375       1.5751    0.005
 Two-year note                 99-193/256   1.6294    0.008
 Three-year note               99-230/256   1.6601    0.011
 Five-year note                98-236/256   1.7287    0.009
 Seven-year note               98-148/256   1.8442    0.005
 10-year note                  98-132/256   1.9153    0.007
 30-year bond                  100-180/256  2.3421    -0.002
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         7.50         0.75    
 U.S. 3-year dollar swap         3.00         0.50    
 U.S. 5-year dollar swap        -0.50         0.50    
 U.S. 10-year dollar swap       -4.50         0.75    
 U.S. 30-year dollar swap      -29.00         1.25    
 (Reporting by Ross Kerber; Editing by Dan Grebler and Richard
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