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Gertrude Chavez-Dreyfuss

UPDATE 1-Speculators trim net long dollar bets for 2nd week -CFTC, Reuters

08 Feb 2019

(Adds table, details, byline) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 8 Speculators pared back their net long bets on the dollar for a second straight week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position was $28.25 billion in the week ended Jan. 8, compared with $30.16 billion in the previous week. The speculative market has been long the dollar since mid-June last year. The CFTC, which had stopped releasing the data because of the 35-day partial U.S. government shutdown, resumed on Feb. 1. U.S. dollar positioning was derived from net contracts of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars. In a broader measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real, and Russian ruble, the U.S. dollar posted a net long position of $27.55 billion as of Jan. 8, compared with $29.55 billion a week earlier. The dollar has struggled since the beginning of the year as several Federal Reserve officials have started to pull back a little bit on their bullish view on U.S. interest rates and the economy. That shift in stance culminated in last week's dovish comments that suggested the U.S. central bank may have to pause its rate-hiking cycle or cut rates if the economy warrants it. In the cryptocurrency market, speculators' net short position on bitcoin Cboe futures increased to 1,306 contracts in the week ended Jan. 8, up from 1,230 short contracts the previous week. Bitcoin remains entrenched in a deep slump, which began early last year, despite a recovery on Friday as the currency slid into oversold conditions. Bitcoin was last up 7.9 percent at $3,623 on the Bitstamp platform. It has dropped roughly 80 percent since soaring to an all-time high of nearly $20,000 in December 2017. Japanese Yen (Contracts of 12,500,000 yen) $6.97 billion 08 Jan 2019 Prior week week Long 42,727 32,712 Short 104,041 121,335 Net -61,314 -88,623 EURO (Contracts of 125,000 euros) $5.782 billion 08 Jan 2019 Prior week week Long 146,271 148,288 Short 186,804 194,936 Net -40,533 -46,648 POUND STERLING (Contracts of 62,500 pounds sterling) $4.861 billion 08 Jan 2019 Prior week week Long 27,670 35,782 Short 87,762 92,696 Net -60,092 -56,914 SWISS FRANC (Contracts of 125,000 Swiss francs) $2.899 billion 08 Jan 2019 Prior week week Long 5,724 5,931 Short 28,910 31,461 Net -23,186 -25,530 CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars) $5.029 billion 08 Jan 2019 Prior week week Long 19,287 34,330 Short 85,289 84,979 Net -66,002 -50,649 AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars) $2.733 billion 08 Jan 2019 Prior week week Long 22,345 27,919 Short 60,120 54,210 Net -37,775 -26,291 MEXICAN PESO (Contracts of 500,000 pesos) $-0.814 billion 08 Jan 2019 Prior week week Long 92,398 82,260 Short 61,416 72,488 Net 30,982 9,772 NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars) $0.106 billion 08 Jan 2019 Prior week week Long 14,895 18,272 Short 16,433 16,310 Net -1,538 1,962 (Reporting by Gertrude Chavez-Dreyfuss in New York Editing by James Dalgleish)

TREASURIES-U.S. yields slide for 4th day on U.S.-China trade worries

08 Feb 2019

(Adds comment, updates prices) * U.S. 30-year yields fall to one-month low * U.S. 2-year, 10-year note yields decline to one-week low * U.S. yields tracking European market By Gertrude Chavez-Dreyfuss NEW YORK, Feb 8 U.S. Treasury yields fell for a fourth straight session on Friday, pressured by global equity market losses on concerns there would be no trade deal between the United States and China by the March 1 deadline. U.S. 30-year yields dropped to one-month lows, while those on two-year and 10-year notes slid to one-week troughs. "This is partially from an equity sell-off that has been a little bit of a risk-off trade," said Ellis Phifer, fixed-income strategist at Raymond James in Memphis, Tennessee. "We have the China trade talks, but we haven't really seen success at this point. Suddenly the bond market is taking its clues from that." U.S. President Donald Trump said on Thursday he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal. A person briefed on the talks said Trump's advisers were concerned that accepting a meeting invitation at this stage would raise unfounded expectations for a quick deal and erode U.S. leverage in the talks, where the two sides remain far apart on core structural intellectual property issues. In afternoon trading, U.S. 10-year note yields fell to 2.632 percent, from 2.654 percent late on Thursday. U.S. 30-year bond yields were also down, at 2.973 percent , from 3.006 percent on Thursday. Thirty-year yields earlier fell to a one-month low of 2.971 percent. On the short end of the curve, U.S. 2-year yields slipped to 2.463 percent, compared with Thursday's 2.479 percent . "The bullish undertones despite back-to-back weeks of coupon supply serve to increase momentum toward lower yields across a variety of tenors," said BMO Capital Markets in a research note. The bank noted that it is closely watching the 2.618 percent level in the 10-year yield as a key near-term test. But with the next nominal benchmark debt issuance not until Feb. 25, BMO said the "lack of reintroduction of additional supply offers another support for our long bias." U.S. yields were also tracking those on Germany's 10-year government bonds, which dropped below 0.1 percent for the first time since late 2016 on Friday, reflecting concerns about economic conditions in the euro zone's largest economy. The 10-year Bund yield fell as low as 0.097 percent , dragging French and Dutch yields to their lowest levels in more than two years,. February 8 Friday 3:25PM New York / 2025 GMT Price Current Net Yield % Change (bps) Three-month bills 2.375 2.4219 0.010 Six-month bills 2.4325 2.4963 0.010 Two-year note 100-17/256 2.465 -0.014 Three-year note 100-46/256 2.4375 -0.013 Five-year note 100-70/256 2.4412 -0.017 Seven-year note 100-156/256 2.529 -0.016 10-year note 99-240/256 2.6321 -0.022 30-year bond 100-140/256 2.9723 -0.034 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 14.00 0.00 spread U.S. 3-year dollar swap 10.75 -0.25 spread U.S. 5-year dollar swap 8.75 -0.25 spread U.S. 10-year dollar swap 2.25 0.00 spread U.S. 30-year dollar swap -18.75 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler and Sonya Hepinstall)

TREASURIES-U.S. yields down for 4th day on U.S.-China trade woes

08 Feb 2019

By Gertrude Chavez-Dreyfuss NEW YORK, Feb 8 U.S. Treasury yields fell for a fourth straight session on Friday, weighed down by global equity market losses on concerns that there would be no trade deal between the United States and China by the March 1 deadline. U.S. 30-year yields dropped to one-month lows, while those on two-year and 10-year notes slid to one-week troughs. "This is partially from an equity sell-off that has been a little bit of a risk-off trade," said Ellis Phifer, fixed-income strategist at Raymond James in Memphis, Tennessee. "We have the China trade talks, but we haven't really seen success at this point. Suddenly the bond market is taking its clues from that." U.S. President Donald Trump said on Thursday he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal. A person briefed on the talks said Trump's advisers were concerned that accepting a meeting invitation at this stage would raise unfounded expectations for a quick deal and erode U.S. leverage in the talks, where the two sides remain far apart on core structural intellectual property issues. In mid-morning trading, U.S. 10-year note yields fell to 2.635 percent, from 2.654 percent late on Thursday. U.S. 30-year bond yields were also down, at 2.985 percent , from 3.006 percent on Thursday. Thirty-year yields earlier fell to a one-month low of 2.976 percent. On the short end of the curve, U.S. 2-year yields slipped to 2.458 percent, compared with Thursday's 2.479 percent . Jim Vogel, interest rates strategist at FTN Financial in Memphis, noted that this week's steady decline in yields is not being accompanied by widespread buying support. "That missing ingredient leaves bond prices vulnerable to a gap higher on either a news jolt or a cumulative run of data that don't meet expectations. A thin rally usually invites profit-taking, but bears can't find momentum for falling bond prices either," Vogel said. U.S. yields were also tracking those on Germany's 10-year government bonds, which dropped below 0.1 percent for the first time since late 2016 on Friday, reflecting concerns about economic conditions in the euro zone's largest economy. The 10-year Bund yield fell as low as 0.097 percent , dragging French and Dutch yields to their lowest levels in more than two years,. February 8 Friday 10:38AM New York / 1538 GMT Price Current Net Yield % Change (bps) Three-month bills 2.3775 2.4244 0.012 Six-month bills 2.425 2.4885 0.003 Two-year note 100-20/256 2.4589 -0.020 Three-year note 100-50/256 2.4321 -0.019 Five-year note 100-74/256 2.4378 -0.020 Seven-year note 100-158/256 2.5278 -0.017 10-year note 99-232/256 2.6357 -0.018 30-year bond 100-68/256 2.9865 -0.020 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 14.75 0.75 spread U.S. 3-year dollar swap 11.50 0.50 spread U.S. 5-year dollar swap 9.00 0.00 spread U.S. 10-year dollar swap 2.25 0.00 spread U.S. 30-year dollar swap -19.50 -0.75 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler)

Crypto bear market threatens to last as potential token supply weighs

08 Feb 2019

NEW YORK Cryptocurrencies may be facing a prolonged bear market.

TREASURIES-U.S. yields slide on global growth and trade fears

07 Feb 2019

* Trump says no plan to meet China's president before March 1 * European Commission, BoE warn on euro zone and UK growth * U.S. 30-year bond auction shows solid demand (Updates prices; adds comment, 30-year bond auction results) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 7 U.S. Treasury yields fell for a third straight day on Thursday, in line with declines in Europe and Britain, spooked by stock market weakness amid economic growth warnings from the European Commission and Bank of England as well as worries about the U.S.-China trade talks. Soft German data and the growth warnings, by the European Commission on Europe and the BoE on Britain, prompted investors to seek cover in U.S. government debt. Fresh concerns about U.S.-China trade negotiations emerged after President Donald Trump confirmed on Thursday that he did not plan to meet with Chinese President Xi Jinping before the March 1 deadline set by the two countries to achieve a trade deal. The concerns accelerated losses in U.S. stocks and pushed U.S. yields to one-week lows. "There are a lot of event risks out there that are worrying investors," said Michael DePalma, chief executive of asset management firm PhaseCapital in New York. "But event risks are episodic, and it seemed like we have a lot of them at the same time." Germany's 10-year bond yields dropped to their lowest level in more than two years, taking a step closer to zero percent, after the European Commission made sharp cuts to its European growth and inflation forecasts. Consistently poor German data recently has raised concerns that Europe's largest economy could tip into recession. At the same time, British 10-year government bond yields touched an eight-month low after the BoE slashed growth forecasts for Britain. A dovish Federal Reserve has also weighed on rates, DePalma said, although he believes the U.S. economy does not warrant a change in the Fed's stance. The Fed last week shifted its stance on monetary policy as it acknowledged the challenges facing the U.S. economy. Its remarks suggested that it may pause its rate-hike cycle, or even ease policy if the economy requires it. "If you look underneath, there is not a whole lot that has changed. I find the Fed's abrupt shift to be unusual, if not unprecedented," DePalma said. In afternoon trading, U.S. 10-year note yields fell to 2.651 percent, from 2.704 percent late on Wednesday. U.S. 30-year bond yields were also down, at 2.993 percent , from 3.038 percent on Wednesday. Thursday's auction of U.S. 30-year bonds was well-received, priced at 3.022 percent, which matched market forecasts at the bid deadline. Bids totaled almost $43.1 billion for a 2.27 bid-to-cover ratio, which was a little stronger than January's 2.19. On the short end of the curve, U.S. 2-year yields slid to 2.479 percent, compared with Wednesday's 2.524 percent . Thursday, Feb. 7 at 1519 EST (2019 GMT): Price Current Net Yield Change (pct) (bps) Three-month bills 2.365 2.4121 -0.005 Six-month bills 2.4225 2.4864 -0.016 Two-year note 100-9/256 2.4815 -0.043 Three-year note 100-34/256 2.4538 -0.043 Five-year note 100-50/256 2.458 -0.049 Seven-year note 100-132/256 2.5438 -0.053 10-year note 99-196/256 2.6518 -0.052 30-year bond 107-132/256 2.9917 -0.046 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 14.25 0.25 spread U.S. 3-year dollar swap 11.25 -0.25 spread U.S. 5-year dollar swap 9.25 0.25 spread U.S. 10-year dollar swap 2.50 0.25 spread U.S. 30-year dollar swap -18.75 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler and Leslie Adler)

TREASURIES-U.S. yields slide on global growth fears

07 Feb 2019

By Gertrude Chavez-Dreyfuss NEW YORK, Feb 7 U.S. Treasury yields fell for a third straight session on Thursday, in line with falls in Europe and Britain, spooked by global stock market weakness amid growth warnings from the European Commission and the Bank of England. Soft German data and downward revisions on Europe's growth forecast by the European Commission, as well as the BoE's reduction of Britain's growth expectations, prompted investors to seek cover in U.S. government debt. "Part of the bid on Treasuries were related to stock weakness and a little more concern about global growth," said Lou Brien, market strategist at DRW Trading Chicago. "These are old concerns that have resurfaced." Germany's 10-year bond yields dropped to their lowest level in more than two years, taking a step closer to zero percent, after sharp cuts to the European Commission's growth and inflation forecasts. Consistently poor German data in recent sessions has raised concerns that Europe's largest economy could tip into recession. At the same time, British 10-year government bond yields touched an eight-month low after the BoE slashed growth forecasts. In morning trading, U.S. 10-year note yields fell to 2.673 percent, from 2.704 percent late on Wednesday. U.S. 30-year bond yields were also down, at 3.016 percent , from 3.038 percent on Wednesday. On the short end of the curve, U.S. 2-year yields slid to 2.497 percent, compared with Wednesday's 2.524 percent . Investors are looking to the U.S. Treasury's $19 billion 30-year bond refunding later on Thursday. The rally in Treasuries is offsetting attempts to sell it ahead of the auction. Investors typically sell Treasuries ahead of an auction to push the yield higher so they can buy them at a lower price. Three of the last four 30-year refunding auctions have come in higher than market forecast, ranging from 0.2 to 2.3 basis points, which signaled less-robust demand. February 7 Thursday 10:37AM New York / 1537 GMT Price Current Net Yield % Change (bps) Three-month bills 2.3675 2.4147 -0.002 Six-month bills 2.43 2.4942 -0.008 Two-year note 100-2/256 2.4958 -0.028 Three-year note 100-22/256 2.4701 -0.027 Five-year note 100-30/256 2.4748 -0.032 Seven-year note 100-104/256 2.561 -0.036 10-year note 99-156/256 2.6698 -0.034 30-year bond 107-16/256 3.0138 -0.024 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 13.75 -0.25 spread U.S. 3-year dollar swap 11.00 -0.50 spread U.S. 5-year dollar swap 8.75 -0.25 spread U.S. 10-year dollar swap 2.00 -0.25 spread U.S. 30-year dollar swap -19.50 -0.75 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler)

TREASURIES-U.S. yields drift lower as Fed rate view still in focus

06 Feb 2019

* U.S. 10-year note auction shows lukewarm demand * Up next: U.S. 30-year bond auction * U.S. yields affected by weak German data (Updates prices; adds comment, U.S. 10-year note auction results) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 6 U.S. Treasury yields slipped for a second straight session on Wednesday, trading in narrow ranges, as investors continued to factor in the Federal Reserve's dovish bent on interest rates, while concerns about slowing growth in Germany added pressure. The Fed last week shifted its stance on monetary policy as it acknowledged the challenges facing the U.S. economy. Its remarks suggested it may pause its rate-hike cycle, or even ease policy if the economy requires it. A soft U.S. 10-year note auction on Wednesday curbed demand for Treasuries, as yields came off lows. But yields overall remained fairly rangebound even though the Fed has reset its outlook on interest rates. Justin Lederer, Treasury analyst at Cantor Fitzgerald in New York, noted that yields are largely back to their range before the Fed's policy-setting Federal Open Market Committee issued its statement after last week's meeting. "Everybody read the Fed comments as dovish and they were. Obviously, we rallied post-FOMC and we saw a little bit of the pricing in of a rate cut. But right now, we're kind of more neutral," Lederer said. With the Fed in a wait-and-see mode as U.S. data delayed by the partial shutdown of the federal government now just coming in, there's no reason for the market not to be in wait-and-see mode as well, Lederer added. U.S. yields also moved in tandem with 10-year German bund yields, which fell after data showed German industrial orders in December fell 1.6 percent, with analysts anticipating a possible recession in the euro zone's largest economy. German 10-year yields fell to a low of 0.15 percent. "Further disappointment from the German manufacturing sector received the lion's share of the credit for the drop in 10-year yields below 2.70 percent," BMO Capital Markets said in a research note. In afternoon trading, U.S. 10-year note yields fell to 2.692 percent, from 2.704 percent late on Tuesday. The U.S. 10-year note auction was lackluster, with the notes sold at the lowest yield for this debt maturity at an auction since January 2018. The bid-to-cover ratio, a gauge of demand, was also lower, at 2.35, versus January's 2.51. U.S. 30-year bond yields were also down, at 3.03 percent , from 3.036 percent on Tuesday. On the short end of the curve, U.S. 2-year yields were flat at 2.52 percent. Investors are now looking to the sale of $19 billion in U.S. 30-year bonds on Thursday. February 6 Wednesday 3:54PM New York / 2054 GMT Price Current Net Yield % Change (bps) Three-month bills 2.37 2.4174 0.000 Six-month bills 2.4375 2.5022 0.000 Two-year note 99-246/256 2.5202 -0.002 Three-year note 100-6/256 2.4919 -0.008 Five-year note 100 2.4999 -0.013 Seven-year note 100-60/256 2.588 -0.012 10-year note 103-176/256 2.6928 -0.011 30-year bond 106-184/256 3.0306 -0.005 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 14.25 -0.25 spread U.S. 3-year dollar swap 11.50 0.50 spread U.S. 5-year dollar swap 9.00 0.50 spread U.S. 10-year dollar swap 2.25 0.00 spread U.S. 30-year dollar swap -18.75 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Susan Thomas and Leslie Adler)

TREASURIES-U.S. yields slide in line with Fed rate outlook; German data weighs

06 Feb 2019

By Gertrude Chavez-Dreyfuss NEW YORK, Feb 6 U.S. Treasury yields fell for a second straight session on Wednesday, as investors continued to factor in the Federal Reserve's dovish shift on interest rates, with concerns about slowing growth in Germany adding to the pressure. The Fed last week shifted its stance on monetary policy as it acknowledged the challenges facing the U.S. economy. Its remarks suggested that it may pause its rate-hike cycle, or even ease policy if the economy requires it. "Hedge funds and the asset managers of the world are betting that the Fed has indeed hinted at a pause," said Wen Lu, rates strategist at TD Securities in New York. "We are currently pricing in about 2.5 basis points of easing and so no hike this year has been priced at all," he added. U.S. yields also moved in tandem with 10-year German bund yields, which fell after German industrial orders in December fell 1.6 percent, with analysts anticipating a possible recession in the euro zone's largest economy. German 10-year yields fell to a low of 0.15 percent. "Further disappointment from the German manufacturing sector received the lion's share of the credit for the drop in 10-year yields below 2.70 percent," BMO Capital Markets said in a research note. "The implicit question for the engine of European growth has shifted from if there will be a slowdown to how severe of a recession to anticipate." In mid-morning trading, U.S. 10-year note yields fell to 2.682 percent, from 2.704 percent late on Tuesday. BMO said with 10-year yields effectively in the middle of the 2019 trading range and the more time spent between 2.54 percent and 2.80 percent, the more difficult it is to play for a re-test of 3.00 percent. U.S. 30-year bond yields, were also down at 3.016 percent , from 3.036 percent on Tuesday. On the short end of the curve, U.S. 2-year yields slipped as well to 2.51 percent, compared with Tuesday's 2.52 percent . Investors are now looking to the sale of $27 billion in U.S. 10-year notes later on Wednesday. Subadra Rajappa, head of U.S. rates strategy at Societe Generale, said the 10-year price needs to fall a little bit more going into auction as it has been "rich on an outright basis." The last 10-year note auction showed solid demand, with a lower yield than market forecasts and an increase in the bid-to-cover ratio, which Rajappa said is a positive for the upcoming auction. February 6 Wednesday 10:41AM New York / 1541 GMT Price Current Net Yield % Change (bps) Three-month bills 2.365 2.4123 -0.005 Six-month bills 2.4325 2.497 -0.005 Two-year note 99-251/256 2.51 -0.012 Three-year note 100-12/256 2.4837 -0.016 Five-year note 100-8/256 2.4932 -0.020 Seven-year note 100-80/256 2.5758 -0.024 10-year note 103-200/256 2.6821 -0.022 30-year bond 107-4/256 3.0161 -0.020 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 15.00 0.50 spread U.S. 3-year dollar swap 12.00 1.00 spread U.S. 5-year dollar swap 9.00 0.50 spread U.S. 10-year dollar swap 2.50 0.25 spread U.S. 30-year dollar swap -18.75 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Susan Thomas)

TREASURIES-U.S. yields retreat, tracking Fed rate outlook

05 Feb 2019

* U.S. service sector index comes in lower than expected * U.S. yield curve flattens * U.S. three-year note auction shows solid results (Adds comment, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 5 U.S. Treasury yields fell on Tuesday, with the 10-year sliding from one-week highs, as the market priced in the Federal Reserve's dovish interest rate view amid an uncertain global economic outlook. U.S. two-year yields also declined from one-week peaks, while 30-year yields dropped after rising for two straight days. "There's a little bit of intra-day volatility, but yields are consolidating around levels that are more consistent with the new position at the Fed," that it could effectively hold rates steady over the next six months, said John Herrmann, rates strategist at MUFG Securities in New York. The Fed last week struck a cautious tone on the U.S. economy, suggesting it will pause its rate-hike cycle, or even ease monetary policy if the economy warrants it. Many economists believe, however, the Fed could hike one more time this year. Herrmann believes the U.S. economy could decelerate this year as the Trump administration's fiscal initiatives run out. "Last year's strong economy is behind us." Data showing a weaker-than-expected U.S. service sector index of 56.7 affirmed a softer economic outlook, with new orders falling to a one-year low. "The weak international backdrop is clearly playing a role, with the new export orders index falling even more sharply," said Michael Pearce, senior U.S. economist, Capital Economics in New York. "We think this is a sign to come, as the impact of the Fed's rate hikes last year feeds through to economic activity, just as the boost from fiscal stimulus fades further," he added. Tuesday's auction of $38 billion in U.S. three-year notes, meanwhile, showed solid demand. The offering was priced at 2.502 percent, the lowest for this maturity at an auction since last April, Treasury data showed. There were $97.0 billion in bids for a 2.55 bid-to-cover ratio, a gauge of demand, which a little better than last month's weak 2.44. "Solid auction supports stronger short U.S. Treasury prices," said Jim Vogel, interest rates strategist, at FTN Financial in Memphis, Tennessee. "It's the first confirmation of 'new' Fed thinking since last Thursday." In afternoon trading, U.S. 10-year note yields fell to 2.70 percent, down from 2.724 late on Monday. U.S. 30-year bond yields were also down at 3.032 percent , from 3.06 percent on Monday. On the short end, U.S. 2-year yields were down at 2.524 percent, compared with Monday's 2.532 percent. The yield curve flattened a little on Tuesday, with the U.S. 10-year and U.S. 2-year note spread falling to 17.2 basis points, retracing auction-related steepening on Monday. Tuesday, Feb. 5 at 1503 EST (2003 GMT): Price Current Net Yield % Change (bps) Three-month bills 2.37 2.4176 -0.010 Six-month bills 2.4375 2.5022 -0.005 Two-year note 99-243/256 2.5263 -0.006 Three-year note 99-246/256 2.5136 -0.011 Five-year note 99-234/256 2.5184 -0.016 Seven-year note 100-32/256 2.6053 -0.015 10-year note 103-140/256 2.7091 -0.015 30-year bond 106-132/256 3.0406 -0.019 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 14.25 0.25 spread U.S. 3-year dollar swap 10.75 0.25 spread U.S. 5-year dollar swap 8.75 0.25 spread U.S. 10-year dollar swap 2.25 0.00 spread U.S. 30-year dollar swap -18.75 0.25 spread (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Richard Leong; Editing by Phil Berlowitz and Susan Thomas)

TREASURIES-U.S. yields fall, in line with Fed rate view

05 Feb 2019

By Gertrude Chavez-Dreyfuss NEW YORK, Feb 5 U.S. Treasury yields fell on Tuesday, with the 10-year sliding from one-week highs, as investors have started to price in the Federal Reserve's dovish interest rate outlook amid an uncertain global economic outlook. U.S. two-year yields also declined from one-week peaks, while 30-year yields dropped after rising two straight days. "There's a little bit of intra-day volatility, but yields are consolidating around levels that are more consistent with the new position at the Fed which is ... it is effectively on hold at least in the next six months," said John Herrmann, rates strategist at MUFG Securities in New York. The Fed last week struck a cautious tone on the U.S. economy, suggesting it will pause its rate-hike cycle, or even ease monetary policy if the economy warrants it. Many economists believe, however, the Fed could hike one more time this year. Herrmann believes the U.S. economy could decelerate this year as the Trump administration's fiscal initiatives run out. "Last year's strong economy is behind us." Data showing a weaker-than-expected U.S. service sector index of 56.7 affirmed a softer economic outlook, with new orders falling to a one-year low. "The number is coming back down to earth. It's consistent with solid growth, maybe not as solid as before," said Gennadiy Goldberg, senior interest rates strategist at TD Securities in New York. In mid-morning trading, U.S. 10-year note yields fell to 2.698 percent, down from 2.724 late on Monday. U.S. 30-year bond yields were also down at 3.029 percent , from 3.06 percent on Monday. On the short end of the curve, U.S. 2-year yields were down on the day at 2.524 percent, compared with Monday's 2.532 percent US2YT=RR. The yield curve flattened a little bit on Tuesday, with the U.S. 10-year and U.S. 2-year note spread at 17.2 basis points, retracing auction-related steepening on Monday. U.S. Treasury prices had weakened on Monday as investors sold government debt to push them lower ahead of an $84 billion auction this week. The U.S. Treasury will sell $38 billion in 3-year notes later on Tuesday. Last month's auction of three year notes picked up a yield higher than market forecast, but overall demand was solid. Analysts at BMO Capital Markets said three-year notes should see steady demand as their yields remained relatively cheap, with heightened supply continuing to highlight buying opportunities. February 5 Tuesday 10:35AM New York / 1535 GMT Price Current Net Yield % Change (bps) Three-month bills 2.375 2.4227 -0.005 Six-month bills 2.4375 2.5022 -0.005 Two-year note 99-243/256 2.5263 -0.006 Three-year note 99-246/256 2.5136 -0.011 Five-year note 99-238/256 2.515 -0.019 Seven-year note 100-44/256 2.5979 -0.022 10-year note 103-160/256 2.7001 -0.024 30-year bond 106-196/256 3.0283 -0.032 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 14.50 0.50 spread U.S. 3-year dollar swap 10.75 0.25 spread U.S. 5-year dollar swap 8.75 0.25 spread U.S. 10-year dollar swap 2.25 0.00 spread U.S. 30-year dollar swap -19.00 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Richard Leong Editing by Phil Berlowitz)

World News

Trump declares U.S.-Mexico emergency for border wall

President Donald Trump on Friday declared a national emergency in a bid to fund his promised wall at the U.S.-Mexico border without congressional approval, an action Democrats vowed to challenge as a violation of the U.S. Constitution.