Edition:
United Kingdom

Gertrude Chavez-Dreyfuss

TREASURIES-Yields slide after weak global manufacturing data

18 Apr 2019

* Weak global PMIs hurt U.S. yields * U.S. retail sales beat expectations * U.S. jobless claims drop to lowest since 1969 (Adds new comment, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, April 18 U.S. Treasury yields fell on Thursday, undermined by weak manufacturing surveys around the world that boosted concerns about a global slowdown. Volume thinned in the afternoon ahead of a long weekend, with financial markets closing for the Good Friday holiday. Prior to Thursday's decline, U.S. yields tracked four-week highs, rising in four of the last six sessions. Treasury yields overall have been supported by generally solid U.S. data that suggested the economy is in far better shape than expected. For instance, U.S. retail sales last month rose 1.6%, handily exceeding forecasts of a 0.9% gain. The number was also a steep turnaround from February's 0.2% fall. However, U.S. retail sales were offset by sluggish French and German surveys of purchasing managers in the manufacturing sector for April, which showed contraction in activity. "The U.S. data were really strong. The retail sales report was great, but they seem to be focused on the fact that the data are struggling out of Europe," said Mary Anne Hurley, vice president of fixed income trading at D.A. Davidson in Seattle. "The problem in Europe would likely keep the Fed (Federal Reserve) on hold." The soft numbers out of Europe came after a report on Japanese manufacturing activity which showed new export orders fell at the fastest pace in almost three years. In early afternoon trading, U.S. 10-year note yields fell to 2.563%, from Wednesday's level of 2.592%. Yields on U.S. 30-year bonds were also lower at 2.961% , down from 2.992% on Wednesday. U.S. 2-year yields slipped to 2.384%, down from 2.402% late on Wednesday. Andrew Hunter, senior U.S. economist at Capital Economics in London, said the retail sales figures provided some comfort that "the economy isn't falling off a cliff." "But they don't change our view that the fading of the fiscal boost and the lagged impact of the Fed's monetary tightening will push GDP growth below its 2 percent potential pace over the coming quarters," he added. A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 192,000 for the week ended April 13, the lowest since September 1969. Claims have now declined for five straight weeks. Thursday, April 18, at 1358 EDT (1758 GMT): Price Current Net Yield Change (pct) (bps) Three-month bills 2.375 2.4219 -0.017 Six-month bills 2.395 2.4641 -0.003 Two-year note 99-192/256 2.3823 -0.020 Three-year note 99-182/256 2.3509 -0.024 Five-year note 98-216/256 2.3743 -0.027 Seven-year note 98-160/256 2.4667 -0.029 10-year note 100-136/256 2.5632 -0.029 30-year bond 100-188/256 2.9626 -0.029 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.75 0.00 spread U.S. 3-year dollar swap 6.50 0.00 spread U.S. 5-year dollar swap 3.25 -0.25 spread U.S. 10-year dollar swap -1.25 -0.25 spread U.S. 30-year dollar swap -23.00 0.25 spread (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Richard Leong; Editing by Bernadette Baum and Chizu Nomiyama)

TREASURIES-Yields fall after weak global manufacturing data

18 Apr 2019

* Weak global PMIs hurt U.S. yields * U.S. retail sales beat expectations * U.S. jobless claims drop to lowest since 1969 (Adds details, comment, byline, table, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, April 18 U.S. Treasury yields fell on Thursday, undermined by weak manufacturing surveys around the world that boosted concerns about a global slowdown. Prior to Thursday's decline, U.S. yields tracked four-week highs, rising in four of the last six sessions. Treasury yields overall have been supported by generally solid U.S. data that suggested the economy is in far better shape than expected. However, French and German surveys of purchasing managers in the manufacturing sector for April showed contraction in activity, pressured yields. The soft data out of Europe came after a report on Japanese manufacturing activity which showed new export orders fell at the fastest pace in almost three years. "There is no springtime for EU manufacturing in April, according to this morning's PMI (purchasing managers' index)," said Jim Vogel, interest rates strategist at FTN Financial in Memphis, Tennessee. "Tremendous buying in fixed income in reaction to the numbers." U.S. yields, however, edged off their lows after U.S. retail sales data in March overwhelmingly beat expectations, easing concerns about a potential economic slowdown. U.S. retail sales last month rose 1.6%, handily exceeding forecasts of a 0.9% gain. The number was also a steep turnaround from February's 0.2% fall. "Overall, the retail sales figures add to the slightly more positive tone of the recent data and provide some comfort that the economy isn't falling off a cliff," said Andrew Hunter, senior U.S. economist, at Capital Economics in London. "But they don't change our view that the fading of the fiscal boost and the lagged impact of the Fed's monetary tightening will push GDP growth below its 2 percent potential pace over the coming quarters," he added. In mid-morning trading, U.S. 10-year note yields fell to 2.552%, from Wednesday's level of 2.592%. Yields on U.S. 30-year bonds were also lower at 2.963% , down from 2.992% on Wednesday. U.S. 2-year yields slipped to 2.378%, down from 2.402% late on Wednesday. A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 192,000 for the week ended April 13, the lowest since September 1969. Claims have now declined for five straight weeks. April 18 Thursday 9:59AM New York / 1359 GMT Price Current Net Yield % Change (bps) Three-month bills 2.38 2.427 -0.012 Six-month bills 2.3925 2.4615 -0.006 Two-year note 99-194/256 2.3781 -0.024 Three-year note 99-186/256 2.3454 -0.030 Five-year note 98-230/256 2.3624 -0.039 Seven-year note 98-180/256 2.4543 -0.042 10-year note 100-160/256 2.5524 -0.040 30-year bond 100-188/256 2.9626 -0.029 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.50 -0.25 spread U.S. 3-year dollar swap 6.25 -0.25 spread U.S. 5-year dollar swap 3.25 -0.25 spread U.S. 10-year dollar swap -1.25 -0.25 spread U.S. 30-year dollar swap -23.25 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Bernadette Baum)

TREASURIES-Yields dip as U.S. stocks fade in holiday-shortened week

17 Apr 2019

* Upbeat Chinese data lifts risk appetite, U.S. yields * Fed speakers were optimistic on U.S. economy * U.S. trade deficit falls to 8-month low * Fed funds futures price in less dovish rate outlook (Adds new comment, Fed speakers) By Gertrude Chavez-Dreyfuss NEW YORK, April 17 U.S. Treasury yields drifted lower from four-week highs on Wednesday, as Wall Street shares lost steam in a holiday-shortened week and investors got back in the market after a recent sell-off. Financial markets are closed on Friday for the Good Friday holiday. "Equities are a little bit weaker and that has helped Treasuries," said Justin Lederer, Treasury trader at Cantor Fitzgerald in New York. "People also just found levels that they were willing to step in and are semi-attractive because we have erased the entire move that started in March." Since hitting a more than one-year low in late March after the Federal Reserve indicated it will, for now, hold off raising interest rates, benchmark U.S. 10-year yields have risen roughly 27 basis points. Earlier in the session, U.S. yields benefited from upbeat Chinese data that boosted risk appetite and eased concerns about a slowdown in the world's second largest economy. Data showed China's economy grew at a steady 6.4 percent pace in the first quarter, as industrial production jumped sharply and consumer demand showed signs of improvement. "There was mostly exuberance earlier on the recent China data and its overall impact on global growth," said Subadra Rajappa, head of U.S. rates strategy, at Societe Generale in New York. In afternoon trading, U.S. 10-year note yields slipped to 2.592%, down from 2.594% late on Tuesday. Yields on U.S. 30-year bonds were also down at 2.991% from 2.993% on Tuesday. On the short end of the curve, U.S. 2-year yields fell to 2.402%, compared with Tuesday's 2.416%. U.S. yields earlier extended their rise after data showed the U.S. trade deficit fell to an eight-month low in February as imports from China plunged. Overall though, there has been optimism about U.S. economic prospects and that should push yields higher, analysts said. "We have always argued that Treasury yields are rich compared to fundamentals and now I think there's a little bit of a catch-up going on," said Societe Generale's Rajappa. "Treasury yields are now trading in line more with fundamentals. There's also probably a lot of easing priced in the market," she added. Federal Reserve speakers were particularly upbeat on Wednesday. Philadelphia Fed President Patrick Harker on Wednesday said believes in the U.S. growth story, which should warrant at least one rate hike this year. St. Louis Fed President James Bullard, on the other hand, said on Wednesday weak U.S. economic data at the start of the year should change for the better in coming months, and ease some of the concerns among investors about the health of the recovery. Fed funds futures are now pricing in a less dovish outlook for the Federal Open market Committee, according to Action Economics. The research firm said the improvement in U.S. and Chinese data and ongoing talk of progress on trade have tempered recession fears, which in turn are reducing the likelihood for a Fed rate cut. April 17 Wednesday 3:04PM New York / 1904 GMT Price !RIC {UScv1} is invalid !RIC !RIC {UScv1} is {UScv1} invalid is invalid !RIC {TYcv1} is invalid !RIC !RIC {TYcv1} is {TYcv1} invalid is invalid Price Current Net Yield % Change (bps) Three-month bills 2.385 2.4328 -0.009 Six-month bills 2.3975 2.4674 0.002 Two-year note 99-182/256 2.4023 -0.014 Three-year note 99-164/256 2.3751 -0.014 Five-year note 98-184/256 2.4009 -0.008 Seven-year note 98-112/256 2.4962 -0.005 10-year note 100-72/256 2.5922 -0.002 30-year bond 100-44/256 2.9911 -0.002 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.75 0.25 spread U.S. 3-year dollar swap 6.50 0.00 spread U.S. 5-year dollar swap 3.50 0.25 spread U.S. 10-year dollar swap -1.00 0.25 spread U.S. 30-year dollar swap -23.25 0.50 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Susan Thomas and Lisa Shumaker)

New U.S. venture capital fund launched with focus on blockchain; $50 million funding

17 Apr 2019

NEW YORK Proof of Capital, a U.S. venture capital fund, was launched on Wednesday with funding of $50 million, its founders said in a statement. The fund will invest in blockchain projects.

TREASURIES-Yields slip as U.S. stocks fall in holiday-shortened week

17 Apr 2019

By Gertrude Chavez-Dreyfuss NEW YORK, April 17 U.S. Treasury yields drifted lower from four-week highs on Wednesday, as Wall Street shares lost steam in a holiday-shortened week and investors got back in the market after a recent sell-off. Financial markets are closed on Friday for the Good Friday holiday. "Equities are a little bit weaker and that has helped Treasuries," said Justin Lederer, Treasury trader at Cantor Fitzgerald in New York. "People also just found levels that they were willing to step in and are semi-attractive because we have erased the entire move that started in March." Since hitting a more than one-year low in late March after the Federal Reserve indicated that it will hold off raising interest rates for now, benchmark U.S. 10-year yields have risen roughly 27 basis points. Earlier in the session, U.S. yields benefited from upbeat Chinese data that boosted risk appetite and eased concerns about a slowdown in the world's second largest economy. Data showed China's economy grew at a steady 6.4 percent pace in the first quarter, as industrial production jumped sharply and consumer demand showed signs of improvement. "There was mostly exuberance earlier on the recent China data and its overall impact on global growth," said Subadra Rajappa, head of U.S. rates strategy, at Societe Generale in New York. In morning trading, U.S. 10-year note yields slipped to 2.59%, down from 2.594% late on Tuesday. Yields on U.S. 30-year bonds were also down at 2.991% , from 2.993% on Tuesday. On the short end of the curve, U.S. 2-year yields fell to 2.404%, compared with Tuesday's 2.416%. U.S. yields earlier extended their rise after data showed the U.S. trade deficit fell to an eight-month low in February as imports from China plunged. Overall though, there has been optimism about U.S. economic prospects and that should push yields higher, analysts said. "We have always argued that Treasury yields are rich compared to fundamentals and now I think there's a little bit of a catch-up going on," said Societe Generale's Rajappa. "Treasury yields are trading in line more with fundamentals. There's probably also a lot of easing priced in the market," she added. April 17 Wednesday 10:23AM New York / 1423 GMT Price Current Net Yield % Change (bps) Three-month bills 2.39 2.4379 -0.004 Six-month bills 2.3975 2.4674 0.002 Two-year note 99-180/256 2.4064 -0.010 Three-year note 99-160/256 2.3806 -0.008 Five-year note 98-182/256 2.4026 -0.006 Seven-year note 98-112/256 2.4962 -0.005 10-year note 100-72/256 2.5922 -0.002 30-year bond 100-36/256 2.9927 0.000 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.75 0.25 spread U.S. 3-year dollar swap 6.50 0.00 spread U.S. 5-year dollar swap 3.50 0.25 spread U.S. 10-year dollar swap -1.00 0.25 spread U.S. 30-year dollar swap -22.75 1.00 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Susan Thomas)

TREASURIES-U.S. yields climb to 4-week peaks as risk appetite improves

16 Apr 2019

* Markets await major Chinese data * U.S. retail sales seen rising 0.9 percent in March * U.S. industrial production comes out flat, weighs on yields (Adds new comment, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, April 16 U.S. Treasury yields rose to four-week highs on Tuesday, bolstered by increased risk appetite that has pushed Wall Street shares higher, as well as expectations of more positive U.S. and Chinese economic data this week. In a week shortened by the Good Friday holiday, investors are awaiting U.S. retail sales data on Thursday, which could show that the economy is far more stable than expected, analysts said. At the same time, major Chinese data due late on Tuesday - gross domestic product, retail sales, among others - could provide some insight into how the world's second-largest economy has been performing. After a sluggish start to the year, Chinese numbers have been more upbeat than expected as monetary authorities increased stimulus measures. That has eased concerns about a China economic slowdown. "There's the thought that with China's stimulus, people are going to focus more on Chinese retail sales and the bigger numbers that we get out of China this evening and without momentum in Treasuries right now, it's possible that that's bringing some insurance selling in Treasuries that you wouldn't necessarily anticipate," said Jim Vogel, interest rates strategist, at FTN Financial in Memphis, Tennessee. He added that this expectation of China drew even more focus on U.S. retail sales data. "Today's moves are what you would expect if retail sales numbers are above expectations," Vogel said. U.S. retail sales for March are expected to rise 0.9%, following a 0.2% decline in the previous month, according to a Reuters poll of analysts. In afternoon trading, U.S. 10-year note yields rose to 2.590%, up from 2.553% late on Monday. Ten-year yields hit a four-week peak of 2.596%. "We kind of moved into this range of 2.40-2.60 percent range in the 10-year. It seems hard for me to believe that the 10-year could get a lot lower," said Jerry Paul, senior vice president and fixed income portfolio manager at ICON Advisers in Denver. "I will be cautious with any 10-year exposure until we get into the high twos in yield," he added. Yields on U.S. 30-year bonds were also higher, at 2.991% , up from 2.963% on Monday. Thirty-year yields also touched a four-week high of 2.998%. On the short end of the curve, U.S. 2-year yields advanced to 2.41%, compared with Monday's 2.392%. The note's yield hit a four-week peak as well of 2.412 percent. U.S. yields, however, dipped after data showed U.S. manufacturing output was unchanged in March after two straight monthly declines, leading to the largest quarterly decrease in production since 2017. April 16 Tuesday 2:15PM New York / 1815 GMT Price Current Net Yield % Change (bps) Three-month bills 2.385 2.433 -0.004 Six-month bills 2.39 2.4596 0.000 Two-year note 99-179/256 2.4083 0.016 Three-year note 99-160/256 2.3805 0.022 Five-year note 98-184/256 2.4008 0.031 Seven-year note 98-116/256 2.4936 0.029 10-year note 100-80/256 2.5886 0.036 30-year bond 100-40/256 2.9919 0.029 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.75 0.00 spread U.S. 3-year dollar swap 6.50 0.00 spread U.S. 5-year dollar swap 3.25 -0.25 spread U.S. 10-year dollar swap -1.50 -0.25 spread U.S. 30-year dollar swap -24.00 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Steve Orlofsky)

TREASURIES-U.S. yields advance as risk appetite increases

16 Apr 2019

By Gertrude Chavez-Dreyfuss NEW YORK, April 16 U.S. Treasury yields rose to four-week highs on Tuesday, bolstered by gains on Wall Street that have raised appetite for risk, as well as expectations of more positive U.S. and Chinese economic data this week. In a week shortened by the Good Friday holiday, investors are awaiting U.S. retail sales data on Thursday, which could show that the economy is far more stable than expected, analysts said. At the same time, significant Chinese data due late on Tuesday - gross domestic product, retail sales, among others - could provide some insight on how the world's second-largest economy has been performing. After a sluggish start to the year, Chinese reports have been more upbeat than expected as monetary authorities increased stimulus measures. That has eased concerns about a Chinese slowdown. "There's the thought that with China's stimulus, people are going to focus more on Chinese retail sales and the bigger numbers that we get out of China this evening and without momentum in Treasuries right now, it's possible that that's bringing some insurance selling in Treasuries that you wouldn't necessarily anticipate," said Jim Vogel, interest rates strategist, at FTN Financial in Memphis, Tennessee. He added that this expectation on China draws even more focus on U.S. retail sales data. "Today's moves are what you would expect if retail sales numbers are above expectations," Vogel said. U.S. retail sales for March are expected to rise 0.9%, following a 0.2% decline in the previous month, according to a Reuters poll of analysts. In late morning trading, U.S. 10-year note yields rose to 2.581%, up from 2.553% late on Monday. Ten-year yields hit a four-week peak of 2.587%. Yields on U.S. 30-year bonds were also higher, at 2.986% , up from 2.963% on Monday. Thirty-year yields also touched a four-week high of 2.996%. On the short end of the curve, U.S. 2-year yields advanced to 2.402%, compared with Monday's 2.392%. The note's yield hit a four-week peak as well of 2.41 percent. U.S. yields, however, dipped after data showed U.S. manufacturing output was unchanged in March after two straight monthly declines, leading to the largest quarterly decrease in production since 2017. Economists polled by Reuters had forecast manufacturing output edging up 0.1 percent in March. April 16 Tuesday 10:32AM New York / 1432 GMT Price Current Net Yield % Change (bps) Three-month bills 2.3875 2.4355 -0.002 Six-month bills 2.3925 2.4622 0.002 Two-year note 99-182/256 2.4021 0.010 Three-year note 99-166/256 2.3723 0.013 Five-year note 98-192/256 2.394 0.024 Seven-year note 98-128/256 2.4861 0.021 10-year note 100-96/256 2.5814 0.028 30-year bond 100-72/256 2.9856 0.023 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 10.00 0.25 spread U.S. 3-year dollar swap 6.75 0.25 spread U.S. 5-year dollar swap 3.25 -0.25 spread U.S. 10-year dollar swap -1.25 0.00 spread U.S. 30-year dollar swap -23.75 0.25 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Steve LOrlofsky)

TREASURIES-U.S. long-dated yields edge lower in holiday-shortened week

15 Apr 2019

* Investors look to U.S. data later this week * U.S. economy not nearing a recession-analysts * Liquidity, trading seen thinning out this week (Adds new comment, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, April 15 U.S. long-dated Treasury yields slipped from four-week highs on Monday in choppy trading, ahead of U.S. data in a holiday-shortened week that will give some guidance on whether the world's largest economy could tip into recession in the near future. Financial markets are closed on Friday for the Good Friday holiday. After hitting a roughly 14-month low around late March, U.S. benchmark 10-year and 30-year yields have risen about 17 and 16 basis points respectively. "I don't think we're nearing recession, but as these things go, they often pop up out of nowhere," said Lou Brien, market strategist at DRW Trading in Chicago. He cited the U.S. unemployment rate, which has stayed low, but this metric was quite low going into the last three recessions anyway. "So it's a lagging indicator in that regard." The other interesting thing, Brien said, is that the Federal Reserve has cut rates ahead of the last three recessions. The Fed's shift from a tightening bias to a neutral one, with the possibility of some easing suggested that if there is corroborating negative data, the Fed would cut rates. "Right now, there is no data to suggest that a cut is imminent," Brien said. U.S. retail sales, industrial production, and housing data are due this week and Stan Shipley, fixed income strategist at Evercore ISI in New York, believes those numbers will show a far more stable economy than many initially thought. Due to the short week, liquidity and activity are likely to be on the light side, analysts said. "As a result, it follows that we will continue to monitor risk asset performance to provide incremental trading guidance for the Treasury market, at least for the moment," BMO Capital Markets said in a research note. "In that vein, the start to earnings season was rather impressive as the banks appear to be doing relatively well, adding to some upward pressure on the equity market as the S&P 500 nears a return to record levels," it added. In afternoon trading, U.S. 10-year note yields slipped to 2.552%, down from 2.56% late on Friday. Yields on U.S. 30-year bonds were also lower at 2.964% , down from 2.971% on Friday. On the short end of the curve, U.S. 2-year yields edged lower to 2.393%, compared with Friday's 2.396%. Yields drifted higher earlier after U.S. data showed a higher-than-expected rise in the New York Fed's Empire State current business conditions to 10.1 in April, from 3.7 in March. April 15 Monday 3:10PM New York / 1910 GMT Price Current Net Yield % Change (bps) Three-month bills 2.37 2.4166 -0.024 Six-month bills 2.3775 2.439 -0.025 Two-year note 99-186/256 2.3936 -0.002 Three-year note 99-176/256 2.3586 0.000 Five-year note 98-220/256 2.3702 -0.005 Seven-year note 98-176/256 2.4563 -0.010 10-year note 100-160/256 2.5525 -0.007 30-year bond 100-176/256 2.965 -0.006 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.75 0.00 spread U.S. 3-year dollar swap 6.50 0.00 spread U.S. 5-year dollar swap 3.50 0.50 spread U.S. 10-year dollar swap -1.25 0.50 spread U.S. 30-year dollar swap -24.00 1.00 spread (Reporting by Gertrude Chavez-DreyfussEditing by Susan Thomas and Cynthia Osterman)

TREASURIES-U.S. long-dated yields fall in holiday-shortened week

15 Apr 2019

By Gertrude Chavez-Dreyfuss NEW YORK, April 15 U.S. long-dated Treasury yields fell from four-week highs on Monday in choppy trading, ahead of U.S. data in a holiday-shortened week that will give some guidance on whether the world's largest economy could tip into recession in the near future. Financial markets are closed on Friday for the Good Friday holiday. After hitting a roughly 14-month low around late March, U.S. benchmark 10-year and 30-year yields have risen about 17 and 16 basis points respectively. "I think you will see that by the end of the week all these fears about a near-term recession that was so prevalent a few months ago will largely vanish," Stan Shipley, fixed income strategist at Evercore ISI in New York, said. "For now, we're sort of in a standstill until we see how the data this week turns out," he added. U.S. retail sales and housing data are due this week and Shipley believes those numbers will show a far more stable economy than many initially thought. Shipley said that the Treasury market has lagged the recovery seen in other markets such as stocks and commodities fueled by improved sentiment about U.S. economic prospects. In due course, U.S. yields will rise, he added. Due to the short week, liquidity and activity are likely on the light side, analysts said. "As a result, it follows that we will continue to monitor risk asset performance to provide incremental trading guidance for the Treasury market, at least for the moment," BMO Capital Markets said in a research note. "In that vein, the start to earnings season was rather impressive as the banks appear to be doing relatively well, adding to some upward pressure on the equity market as the S&P 500 nears a return to record levels," it added. In late morning trading, U.S. 10-year note yields slipped to 2.557%, down from 2.56% late on Friday. Yields on U.S. 30-year bonds were also lower at 2.967% , down from 2.971% on Friday. On the short end of the curve, U.S. 2-year yields edged up to 2.399%, compared with Friday's 2.396%. April 15 Monday 10:36AM New York / 1436 GMT Price Current Net Yield % Change (bps) Three-month bills 2.3825 2.4294 -0.012 Six-month bills 2.39 2.452 -0.012 Two-year note 99-186/256 2.3936 -0.002 Three-year note 99-176/256 2.3586 0.000 Five-year note 98-220/256 2.3702 -0.005 Seven-year note 98-176/256 2.4563 -0.010 10-year note 100-164/256 2.5507 -0.009 30-year bond 100-200/256 2.9603 -0.011 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.75 0.00 spread U.S. 3-year dollar swap 6.75 0.25 spread U.S. 5-year dollar swap 3.25 0.25 spread U.S. 10-year dollar swap -1.25 0.50 spread U.S. 30-year dollar swap -24.50 0.50 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Susan Thomas)

TREASURIES-U.S. yields rise, touch 3-week peaks as risk appetite rises

12 Apr 2019

* China data boosts risk appetite, U.S. yields * U.S. consumer sentiment generally stable * U.S. yield curve steepens as recessionary fears ease (New throughout, updates prices, yields, market activity and comment) By Gertrude Chavez-Dreyfuss NEW YORK, April 12 U.S. Treasury yields rose to three-week highs on Friday as investors put money into riskier assets after data showed Chinese exports rebounded in March, easing concerns about global economic growth. The yield curve has also steepened, diminishing fears of a U.S. recession, analysts said. "This move in yields is driven largely by stronger data out of China overnight," said Bill Merz, head of fixed income research at U.S. Bank Wealth Management in Minneapolis. Data showed China's exports rose 14.2% in March from a year earlier, although imports contracted for a fourth straight month. U.S. yields have risen for two straight sessions on both the long and short end, fueled as well by generally solid U.S. economic data. Upbeat U.S. reports on Friday showed import prices beating expectations and consumer sentiment stabilizing. Analysts said U.S. data for 2019 so far indicates a recession is not likely, contrary to signals from the rates market that the Federal Reserve may have to ease monetary policy soon. For example, MUFG Securities models continue to forecast three interest rate cuts by the June 2020 Fed meeting. The bank's models show a 97 percent probability the Fed will cut rates by 25 basis points at the July meeting, said John Hermann, MUFG rates strategist. But U.S. Bank's Merz said to justify a rate cut this year or next, "we would need to see a material deterioration in the economic data." He said that while signs show the U.S. economy is slowing, it is "slowing from a really good place." In afternoon trading, U.S. 10-year note yields were 2.556% , up from 2.504% late on Thursday. Over the last two weeks, 10-year yields have risen more than 13 basis points. Yields on U.S. 30-year bonds were 2.968%, up from 2.937% on Thursday. On the short end, U.S. 2-year yields edged up to 2.385% from Thursday's 2.356%. Yields for all three maturities hit three-week peaks. "For now, we expect continued upward pressure on bond yields," Merz said. U.S. yields also moved in line with the European bond market, with 10-year German bund yields rising to three-week highs. The yield spread between U.S. 2-year and 10-year notes has widened to 16.5 basis points, steepening the curve. Friday, April 12 at 1506 EDT (1906 GMT): Price Current Net Yield % Change (bps) Three-month bills 2.3875 2.4347 0.006 Six-month bills 2.3975 2.46 0.001 Two-year note 99-185/256 2.3955 0.039 Three-year note 99-174/256 2.3612 0.054 Five-year note 98-212/256 2.3768 0.063 Seven-year note 98-156/256 2.4686 0.064 10-year note 100-140/256 2.5615 0.058 30-year bond 100-136/256 2.9729 0.036 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.75 1.00 spread U.S. 3-year dollar swap 6.50 0.75 spread U.S. 5-year dollar swap 3.00 0.00 spread U.S. 10-year dollar swap -1.75 0.00 spread U.S. 30-year dollar swap -25.00 0.50 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Stephen Orlofsky and David Gregorio)

World News