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Gertrude Chavez-Dreyfuss

FX options flag uncertainty before U.S. midterm election; bonds complacent

19 Oct 2018

NEW YORK Currency options investors are bracing for increased volatility and possible U.S. dollar weakness going into the U.S. midterm elections next month.

RPT-Hacked, scammed and on your own: navigating cryptocurrency 'wild west'

18 Oct 2018

NEW YORK, Oct 18 When Peggy and Marco Lachmann-Anke learned in January that hackers cracked a 40-character password and cleaned out their cryptocurrency wallet, they did not go to the police or alert the tokens' issuer, the Berlin-based technology group IOTA.

Hacked, scammed and on your own: navigating cryptocurrency 'wild west'

18 Oct 2018

NEW YORK When Peggy and Marco Lachmann-Anke learned in January that hackers cracked a 40-character password and cleaned out their cryptocurrency wallet, they did not go to the police or alert the tokens' issuer, the Berlin-based technology group IOTA.

China Treasury holdings in August fall to lowest since June 2017: Treasury data

16 Oct 2018

NEW YORK China's holdings of U.S. Treasuries fell for a third straight month in August to their lowest in more than a year, Treasury Department data showed on Tuesday, in what was likely a move to support its currency in the face of emerging market volatility.

UPDATE 1-China Treasury holdings in August fall to lowest since June 2017 -Treasury data

16 Oct 2018

NEW YORK, Oct 16 China's holdings of U.S. Treasuries fell for a third straight month in August to their lowest in more than a year, Treasury Department data showed on Tuesday, in what was likely a move to support its currency in the face of emerging market volatility.

TREASURIES-U.S. yields inch higher as stocks stage rebound

12 Oct 2018

* U.S. 10-, 30-year yields on track for weekly fall * Univ. of Michigan 5-year inflation outlook falls in Oct * U.S. 10-year yield between 3 pct-3.25 pct unsustainable -analyst (Adds new comment, updates prices, table) By Gertrude Chavez-Dreyfuss NEW YORK, Oct 12 U.S. Treasury yields edged higher on Friday, rising from the previous session on Wall Street's selloff, as equities recovered globally and investors unwound safe-haven bids. Some market participants were, however, skeptical that rates could go higher again as quickly as they did last week. Yields on both the benchmark U.S. 10-year notes and 30-year bonds have fallen 9 basis points this week, on track for their largest weekly fall in nearly five months. After a two-day rout, shares on Wall Street were higher, although some analysts said Friday's gains do not mean that the turbulence is over. U.S. stocks sold off this week, hurt by the prospect of rising rates. "We're sure the Fed is paying close attention to the equity rout," said John Taylor, president of macro research firm Taylor Global Vision in New York. "For now, it's sit back and watch. But the Fed has got be anxious." "More of this nasty environment and there is no hike in December," he added, noting that a persistent sell-off focuses the debate on the timing of the next rate cut. In afternoon trading, U.S. 10-year note yields were at 3.140 percent, slightly up from 3.131 percent late Thursday. U.S. 30-year bond yields rose to 3.315 percent, from Thursday's 3.305 percent. On the short end of the curve, U.S. two-year yields were at 2.836 percent. "The market will definitely re-test the highs in yields, but I don't know how high they can go," said Lou Brien, market strategist at DRW Trading in Chicago, "I don't think they can go much higher." Brien believes that a U.S. 10-year yield between 3.0 to 3.25 percent would be unsustainable. "The long-end moves to the beat of inflation and inflation expectations, and those are relatively low and well-anchored," said DRW's Brien. For instance, the University of Michigan consumer sentiment report on Friday showed a preliminary index for October of 99, slightly lower than expectations. But more importantly, the five-year inflation outlook component of the survey, a key measure that the Fed looks at, was at 2.3 versus 2.5 in September. Jon Hill, rates strategist, at BMO Capital Markets in New York said that the 2.3 reading on inflation outlook was tied for the lowest level on record. "With (Fed Chair Jerome) Powell's focus on series such as this as a 'key' input for monetary policy, this will serve as a dovish talking point, and help keep long tenor yields in check," Hill said. The University of Michigan report followed U.S. data on Thursday that also showed tame inflation: a weaker-than-expected rise in U.S. consumer prices for September in both the headline and core number. October 12 Friday 2:58PM New York / 1858 GMT Price Current Net Yield % Change (bps) Three-month bills 2.2275 2.2707 0.005 Six-month bills 2.38 2.4418 0.000 Two-year note 99-212/256 2.8405 0.001 Three-year note 99-218/256 2.927 0.000 Five-year note 99-116/256 2.9943 0.007 Seven-year note 99-124/256 3.0828 0.010 10-year note 97-196/256 3.1406 0.010 30-year bond 94-12/256 3.3156 0.011 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 19.25 0.25 spread U.S. 3-year dollar swap 16.75 0.50 spread U.S. 5-year dollar swap 12.25 -0.50 spread U.S. 10-year dollar swap 4.25 -0.50 spread U.S. 30-year dollar swap -10.50 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Jeffrey Benkoe and Nick Zieminski)

TREASURIES-Yields recover as U.S. stocks stage rebound

12 Oct 2018

* U.S. 10-year, 30-year yields on track for weekly fall * Univ. of Michigan 5-year inflation outlook falls in Oct * U.S. import prices rise (Recasts, adds comments, table, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, Oct 12 U.S. Treasury yields rose on Friday, rebounding from the previous session on Wall Street's selloff, as equities staged a strong recovery globally and investors unwound safe-haven bids. Market participants were, however, skeptical that rates could go higher again as quickly as they did last week. Yields on benchmark U.S. 10-year notes this week have fallen nearly 7 basis points and the 30-year has slid 6 basis points, on track for their largest weekly fall in roughly two months. After a two-day rout, shares on Wall Street were higher. "It's not unusual for Treasuries to give back some of their gains as stocks recover," said Lou Brien, market strategist, at DRW Trading in Chicago "The market will definitely re-test the highs in yields, but I don't know how high they can go. I don't think they can go much higher," he added. In morning trading, U.S. 10-year note yields were at 3.163 percent, up from 3.131 percent late Thursday. U.S. 30-year bond yields rose to 3.336 percent, from Thursday's 3.305 percent. On the short end of the curve, U.S. two-year yields were at 2.852 percent, up from 2.84 percent on Thursday. Some market participants think a U.S. 10-year yield between 3.0 to 3.25 percent was unsustainable. "The long-end moves to the beat of inflation and inflation expectations and those are relatively low and well-anchored," said DRW's Brien. For instance, the University of Michigan consumer sentiment report on Friday showed a preliminary index for October of 99, slightly lower than expectations. But more importantly, the five-year inflation outlook component of the survey, a key measure that the Fed looks at, was at 2.3 versus 2.5 in September. Jon Hill, rates strategist, at BMO Capital Markets in New York said that the 2.3 reading on inflation outlook was tied for the lowest level on record. "With (Fed Chair Jerome) Powell's focus on series such as this as a 'key' input for monetary policy, this will serve as a dovish talking point, and help keep long tenor yields in check," Hill said. The University of Michigan report followed U.S. data on Thursday that also showed tame inflation: A weaker-than-expected rise in U.S. consumer prices for September in both the headline and core number. Earlier in the session, a report showed U.S. import prices grew at a faster pace than expected last month.. The data pushed Treasury yields slightly higher. October 12 Friday 10:38 AM New York / 1438 GMT Price Current Net Yield % Change (bps) Three-month bills 2.2275 2.2707 0.005 Six-month bills 2.385 2.447 0.005 Two-year note 99-204/256 2.857 0.017 Three-year note 99-204/256 2.9462 0.019 Five-year note 99-92/256 3.0149 0.028 Seven-year note 99-92/256 3.1029 0.030 10-year note 97-144/256 3.1651 0.034 30-year bond 93-164/256 3.3381 0.033 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 19.00 0.00 spread U.S. 3-year dollar swap 16.50 0.25 spread U.S. 5-year dollar swap 12.25 -0.50 spread U.S. 10-year dollar swap 4.25 -0.50 spread U.S. 30-year dollar swap -10.50 0.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Jeffrey Benkoe)

TREASURIES-Yields fall to one-week low as U.S. stocks sell off again

11 Oct 2018

* U.S. CPI data weaker than expected * Stocks fall, tame CPI not stopping Fed from hiking -analyst * Markets await U.S. 30-year auction (Adds comment, 30-year auction results; updates prices, table) By Gertrude Chavez-Dreyfuss NEW YORK, Oct 11 U.S. Treasury yields fell to one-week lows on Thursday, sliding for a second straight session, as Wall Street shares dropped a day after posting steep losses on worries about prospects for rising interest rates. A weaker-than-expected rise in U.S. inflation for September also added to Treasuries bullish tone and may have partly tempered expectations of more aggressive Federal Reserve interest rate hikes. Investors kept a close eye on U.S. stocks after the previous day's fall. By late afternoon, Wall Street shares were down in choppy trading. "Bonds are looking closely at what's going on in stocks and therefore all news is bad news," said Stan Shipley, market strategist, at Evercore ISI in New York. "Investors are saying that if stocks are this weak, there must be a risk out there that I don't see. Bonds and stocks used to trade opposite each other, now they're trading with each other," he added. Bond strategists though said the stocks fall should not stop the Fed from hiking. Thursday's softer-than-forecast U.S. consumer prices data weighed on yields as well, but analysts said this should also not deter the Fed from its rate path. The U.S. Consumer Price Index rose 0.1 percent last month after rising 0.2 percent in August. Excluding the volatile food and energy components, the CPI edged up 0.1 percent for the second straight month, after gaining 0.2 percent in May, June and July. George Goncalves, managing director and head of fixed income strategy at Nomura in New York, said the tame inflation data could slow the momentum in yields, but the Fed will continue lifting rates. "It does make people think that it (inflation) is not imminent of a danger and therefore the Fed will maintain its gradual pace of every quarter," he said. "It takes away some of the concern that inflation is accelerating, but not enough to turn us back into rally mode." The U.S. 30-year auction, meanwhile, saw solid demand, with the bond picking up a yield of 3.344 percent, the highest at an auction for this maturity since July 2014. The ratio of bids to the amount of supply offered was 2.42, the strongest since January, compared with 2.34 at the previous 30-year sale in September. In late afternoon trading, U.S. 10-year note yields were at 3.142 percent, down from 3.225 percent late on Wednesday. Earlier in the global session, 10-year yields hit a one-week low of 3.124 percent. U.S. 30-year bond yields fell to 3.316 percent, versus Wednesday's 3.401 percent. The yield earlier dropped to 3.229 percent, the lowest since Oct. 3. On the short end of the curve, U.S. two-year yields were at 2.852 percent, down from 2.881 percent on Wednesday. October 11 Thursday 3:36PM New York / 1936 GMT Price Current Net Yield % Change (bps) Three-month bills 2.2225 2.266 -0.008 Six-month bills 2.38 2.4423 -0.006 Two-year note 99-206/256 2.8525 -0.029 Three-year note 99-208/256 2.9408 -0.046 Five-year note 99-110/256 2.9993 -0.062 Seven-year note 99-120/256 3.0852 -0.077 10-year note 97-196/256 3.1404 -0.085 30-year bond 94-28/256 3.3121 -0.089 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 18.75 0.00 spread U.S. 3-year dollar swap 16.25 -0.50 spread U.S. 5-year dollar swap 12.75 0.50 spread U.S. 10-year dollar swap 4.50 0.25 spread U.S. 30-year dollar swap -10.25 1.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Susan Thomas)

TREASURIES-Yields slide to one-week low as U.S. stocks in focus

11 Oct 2018

* U.S. CPI data weaker than expected * Stocks fall, tame CPI not stopping Fed from hiking -analyst * Markets await U.S. 30-year auction (Recasts first paragraph to update Wall Street moves; adds new comment; updates prices, table) By Gertrude Chavez-Dreyfuss NEW YORK, Oct 11 U.S. Treasury yields fell to one-week lows on Thursday, sliding for a second straight session as Wall Street shares weakened a day after posting steep losses on worries about prospects for rising interest rates. A weaker-than-expected rise in U.S. inflation for September also added to Treasuries' bullish tone and may have partly tempered expectations of more aggressive Federal Reserve interest rate hikes. Investors kept a close eye on U.S. stocks after the previous day's fall. At midday, Wall Street shares were in the red in choppy trading. "Stocks are a trigger for the bond rally, but it's not exactly on a one-for one basis," said Jim Vogel, senior rates strategist at FTN Financial in Memphis, Tennessee. "I think it's less about flight to quality than it is a temporary reversal of the strong bias toward steepening and a strong bias that rates are going to continue on their trajectory of last week," he added. The yield curve steepened last week on the U.S. 5-year note and U.S. 30-year metric and on Monday, the spread on those two maturities rose to 36.2 basis points, the widest since late May. U.S. yields accelerated their ascent last week on strong economic data and the Fed's hawkish outlook for interest rates. While Thursday's softer-than-forecast U.S. consumer prices data weighed on yields, analysts said this should not deter the Fed from hiking. The Consumer Price Index rose 0.1 percent last month after rising 0.2 percent in August. Excluding the volatile food and energy components, the CPI edged up 0.1 percent for the second straight month. The so-called core index had increased 0.2 percent in May, June and July. George Goncalves, managing director and head of fixed income strategy at Nomura in New York, said the tame inflation data could slow the momentum in yields, but the Fed will continue lifting rates. "It does make people think that it (inflation) is not imminent of a danger and therefore the Fed will maintain its gradual pace of every quarter," he said. "It takes away some of the concern that inflation is accelerating, but not enough to turn us back into rally mode." In midday trading, U.S. 10-year note yields were at 3.164 percent, down from 3.225 percent late on Wednesday. Earlier in the global session, 10-year yields hit a one-week low of 3.142 percent. U.S. 30-year bond yields fell to 3.341 percent, versus Wednesday's 3.401 percent. The yield earlier dropped to 3.329 percent, the lowest since Oct. 3. On the short end of the curve, U.S. two-year yields were at 2.856 percent, down from 2.881 percent on Wednesday. The market is looking to the Treasury's auction of $15 billion in re-opened U.S. 30-year bonds later in the session. The U.S. 3- and 10-year sales auctions held on Wednesday were lackluster, analysts said. October 11 Thursday 11:58AM New York / 1558 GMT Price Current Net Yield % Change (bps) Three-month bills 2.225 2.2685 -0.005 Six-month bills 2.3875 2.4501 0.002 Two-year note 99-204/256 2.8566 -0.024 Three-year note 99-202/256 2.949 -0.038 Five-year note 99-90/256 3.0164 -0.045 Seven-year note 99-84/256 3.1079 -0.054 10-year note 97-140/256 3.1668 -0.058 30-year bond 93-140/256 3.3433 -0.058 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 19.00 0.25 spread U.S. 3-year dollar swap 16.50 -0.25 spread U.S. 5-year dollar swap 12.75 0.50 spread U.S. 10-year dollar swap 4.50 0.25 spread U.S. 30-year dollar swap -10.50 0.75 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Susan Thomas)

TREASURIES-Yields slide to one-week low as U.S. stocks in focus

11 Oct 2018

* U.S. CPI data comes out weaker than expected * U.S. stocks higher after Wednesday's sell-off * Markets await U.S. 30-year auction (Recasts, adds comment, table, details, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, Oct 11 U.S. Treasury yields fell to one-week lows on Thursday, sliding for a second straight session amid a sell-off in global stocks spurred by a sharp drop on Wall Street overnight. A weaker-than-expected rise in U.S. inflation for September also added to the bullish tone to Treasuries and may have partly paused expectations of a more aggressive Federal Reserve in terms of raising interest rates. But investors on Thursday kept a closer eye on U.S. stocks after the previous day's fall, partly triggered by prospects for rising rates. Wall Street shares traded mixed on the day on Thursday in choppy trading. Analysts said it will take more than a daily stock market correction to stop the Fed from hiking. "The market is not necessarily going to take out much from the yield path," said George Goncalves, managing director and head of fixed income strategy at Nomura in New York. "I don't view this as an indication that there's a turn in the market. I just think it's natural to see bonds rally after a big equity move," he added. The softer-than-forecast U.S. consumer prices data was also not a deterrent to the Fed's tightening stance, analysts said. The Consumer Price Index increased 0.1 percent last month after rising 0.2 percent in August. Excluding the volatile food and energy components, the CPI edged up 0.1 percent for the second straight month. The so-called core index had increased 0.2 percent in May, June and July. Nomura's Goncalves said the tame inflation data could slow the momentum in yields, but the Fed will continue lifting rates. "It does make people think that it (inflation) is not imminent of a danger and therefore the Fed will maintain its gradual pace of every quarter," the Nomura strategist said. "It takes away some of the concern that inflation is accelerating, but not enough to turn us back into rally mode," he added. In morning trading, U.S. 10-year note yields were last at 3.181 percent, down from 3.225 percent late on Wednesday. Earlier in the global session, 10-year yields hit a one-week low of 3.142 percent. U.S. 30-year bond yields also fell to 3.364 percent , versus Wednesday's 3.401 percent. The yield earlier dropped to 3.329 percent, the lowest since Oct. 3. On the short end of the curve, U.S. two-year yields were up at 2.869 percent, slightly down from 2.881 percent on Wednesday. The market is now looking to the Treasury's auction of $15 billion in re-opened U.S. 30-year bonds. So far the U.S. 3- and 10-year sales auctions held on Wednesday were lackluster, analysts said. October 11 Thursday 10:11AM New York / 1411 GMT Price Current Net Yield % Change (bps) Three-month bills 2.2275 2.2711 -0.003 Six-month bills 2.3925 2.4553 0.007 Two-year note 99-198/256 2.869 -0.012 Three-year note 99-192/256 2.9627 -0.024 Five-year note 99-74/256 3.0301 -0.031 Seven-year note 99-64/256 3.1205 -0.041 10-year note 97-104/256 3.1837 -0.041 30-year bond 93-64/256 3.3598 -0.041 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 19.00 0.25 spread U.S. 3-year dollar swap 16.50 -0.25 spread U.S. 5-year dollar swap 12.75 0.50 spread U.S. 10-year dollar swap 4.50 0.25 spread U.S. 30-year dollar swap -10.75 0.50 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Chizu Nomiyama)

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