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Karen Brettell

Yields decline as global equity rout sparks safety buying

20 Nov 2018

NEW YORK Benchmark U.S. Treasury yields fell to seven-week lows on Tuesday as global stock market declines boosted demand for safe haven debt, before giving up some price gains as investors closed positions before Thursday's Thanksgiving holiday.

TREASURIES-Yields decline as global equity rout sparks safety buying

20 Nov 2018

(Updates prices) * Sliding stocks boosts demand for Treasuries * Concerns about slowing global growth add to bond bid * Bond market closed Thursday, closes early Friday By Karen Brettell NEW YORK, Nov 20 Benchmark U.S. Treasury yields fell to seven-week lows on Tuesday as global stock market declines boosted demand for safe haven debt, before giving up some price gains as investors closed positions before Thursday's Thanksgiving holiday. Stocks were hurt by worries over softening demand for Apple Inc's iPhone and corporate growth prospects, while oil prices sank on concerns about rising global supply. “The near-term guidance Treasuries are taking are from broader risk assets, so they are certainly paying attention to the fall in equities globally,” said Jon Hill, U.S. rates strategist at BMO Capital Markets in New York. Benchmark 10-year notes fell to 3.036 percent, the lowest since Sept. 28, before rising back to 3.052 percent. Analysts attributed the rise off the yield lows to investors closing trades with liquidity expected to decline before Thursday's Thanksgiving holiday. The 10-year yields have declined from 3.25 percent on Nov. 7 and are at the low end of the range they have traded in since the beginning of October. The bond market will be closed on Thursday and will close early on Friday. Fears about slowing global growth have also boosted demand for U.S. government bonds as investors contemplate how a slowdown will impact further rate increases by the U.S. central bank. “The background for a lot of what’s going on is a reassessment of the Fed’s path of policy as it relates to the growing concern about global growth as well as a potential recession going into 2020 and 2021,” Hill said. Two-year note yields , which are highly sensitive to interest rates, have fallen to 2.791 percent from 2.977 percent on Nov. 8, and are trading near their lowest levels since Sept. 18. Richard Clarida, the Fed's newly appointed vice chair, on Friday noted there was “some evidence of global slowing,” adding “that's something that is going to be relevant as I think about the outlook for the U.S. economy." Fed Chairman Jerome Powell said last Wednesday that softness in housing and high levels of corporate debt had caught the Federal Reserve's eye, even as a "really strong" U.S. economy was likely to continue growing. New York Fed President John Williams on Monday said that the U.S. central bank was pushing ahead with gradual rate-hike plans next month as it marches toward a more normal policy stance. (Editing by Bernadette Baum and Lisa Shumaker) )

TREASURIES-Yields decline as global equity rout sparks safety buying

20 Nov 2018

* Concerns about slowing global growth adds to bond bid * Bond market closed Thursday, closes early Friday By Karen Brettell NEW YORK, Nov 20 Benchmark U.S. Treasury yields fell to seven-week lows on Tuesday as global stock market declines boosted demand for safe haven debt and on concerns slowing global growth will complicate the Federal Reserve’s plans to continue hiking interest rates. World stock markets fell as worries over softening demand for the iPhone prompted a selloff by tech stocks, a day after a tech-led weakness battered U.S. equity markets. Italian government bond yields jumped to one-month highs, pushed up by risk aversion on the sharp stock losses, tensions over Britain’s exit from the European Union and concerns about the Italian budget. “The near-term guidance Treasuries are taking are from broader risk assets, so they are certainly paying attention to the fall in equities globally,” said Jon Hill, U.S. rates strategist at BMO Capital Markets in New York. Fears about slowing global growth also boosted demand for U.S. government bonds as investors contemplated how a slowdown will impact further rate increases by the U.S. central bank. “The background for a lot of what’s going on is a reassessment of the Fed’s path of policy as it relates to the growing concern about global growth as well as a potential recession going into 2020 and 2021,” Hill said. Richard Clarida, the Fed's newly appointed vice chair, on Friday noted there was “some evidence of global slowing,” adding “that's something that is going to be relevant as I think about the outlook for the U.S. economy." Fed Chairman Jerome Powell said last Wednesday that softness in housing and high levels of corporate debt had caught the Federal Reserve's eye, even as a "really strong" U.S. economy was likely to continue growing. New York Fed President John Williams on Monday said that the U.S. central bank was pushing ahead with gradual rate-hike plans next month as it marches toward a more normal policy stance. Benchmark 10-year notes gained 3/32 in price to yield 3.050 percent, after earlier dropping to 3.036 percent, the lowest since Sept. 28. Two-year note yields , which are highly sensitive to interest rates, have fallen to 2.791 percent from 2.977 percent on Nov. 8, and are trading near their lowest levels since Sept. 18. The bond market will be closed on Thursday for the Thanksgiving holiday, and will close early on Friday. (Editing by Bernadette Baum) )

TREASURIES OUTLOOK-Yields fall as tumbling stocks prompt safety buying

19 Nov 2018

* Falling stocks boost demand for Treasuries * NY Fed's Williams affirms further gradual rate hikes * Bond market closed Thursday for U.S. Thanksgiving holiday By Karen Brettell NEW YORK, Nov 19 U.S. Treasury yields fell to six-week lows on Monday as stocks fell, boosting demand for low-risk U.S. government debt. Major stock indexes slid 2 percent as a slump in Apple shares battered the technology sector while conflicting signals over the state of play between the United States and China on their trade dispute kept investors on edge. Benchmark 10-year notes gained 6/32 in price to yield 3.054 percent, the lowest since Oct. 3 and down from 3.074 percent on Friday. "The yields are lower today because of the stock market," said Lou Brien, a market strategist at DRW Trading in Chicago. Comments by New York Fed President John Williams on Monday that the U.S. central bank is pushing ahead with gradual rate-hike plans next month as it marches toward a more normal policy stance may have added pressure to stocks. Some investors questioned whether the Fed will be able to continue raising rates, possibly harming economic growth. Williams' comments "probably helped push the stocks down to a new leg because the comments by Clarida last week, although hardly definitive, were adding a little bit more uncertainty to the path of policy," Brien said. Richard Clarida, the Fed's newly appointed vice chair, said on Friday that U.S. interest rates are nearing Fed estimates of a neutral rate, which "makes sense." "The market's interpretations of those comments were very dovish," said Thomas Simons, a money market economist at Jefferies in New York. Fed Chairman Jerome Powell said last Wednesday that a "really strong" U.S. economy is likely to continue growing, but softness in housing and high levels of corporate debt have caught the Federal Reserve's eye. The bond market will be closed on Thursday for the Thanksgiving holiday, and will close early on Friday. (Editing by Jeffrey Benkoe)

TREASURIES-Yields fall as tumbling stocks prompt safety buying

19 Nov 2018

(Recasts with yield fall, adds Fed's Williams' comments, updates prices) * Falling stocks boost demand for Treasuries * NY Fed's Williams affirms further gradual rate hikes * Bond market closed Thursday for U.S. Thanksgiving holiday By Karen Brettell NEW YORK, Nov 19 U.S. Treasury yields fell to six-week lows on Monday as stocks fell, boosting demand for low-risk U.S. government debt. Major stock indexes slid 2 percent as a slump in Apple shares battered the technology sector while conflicting signals over the state of play between the United States and China on their trade dispute kept investors on edge. Benchmark 10-year notes gained 6/32 in price to yield 3.054 percent, the lowest since Oct. 3 and down from 3.074 percent on Friday. "The yields are lower today because of the stock market," said Lou Brien, a market strategist at DRW Trading in Chicago. Comments by New York Fed President John Williams on Monday that the U.S. central bank is pushing ahead with gradual rate-hike plans next month as it marches toward a more normal policy stance may have added pressure to stocks. Some investors questioned whether the Fed will be able to continue raising rates, possibly harming economic growth. Williams' comments "probably helped push the stocks down to a new leg because the comments by Clarida last week, although hardly definitive, were adding a little bit more uncertainty to the path of policy," Brien said. Richard Clarida, the Fed's newly appointed vice chair, said on Friday that U.S. interest rates are nearing Fed estimates of a neutral rate, which "makes sense." "The market's interpretations of those comments were very dovish," said Thomas Simons, a money market economist at Jefferies in New York. Fed Chairman Jerome Powell said last Wednesday that a "really strong" U.S. economy is likely to continue growing, but softness in housing and high levels of corporate debt have caught the Federal Reserve's eye. The bond market will be closed on Thursday for the Thanksgiving holiday, and will close early on Friday. (Editing by Jeffrey Benkoe) )

TREASURIES-Bonds little changed before Fed's Williams speaks

19 Nov 2018

* NY Fed's Williams to speak * Bond market closed Thursday for U.S. Thanksgiving holiday By Karen Brettell NEW YORK, Nov 19 U.S. Treasury yields were little changed on Monday before New York Federal Reserve President John Williams was due to speak after comments by Richard Clarida, the newly appointed vice chair of the Federal Reserve, were viewed as dovish. Clarida said on Friday that U.S. interest rates are nearing Fed estimates of a neutral rate, and being at neutral "makes sense." Fed Chairman Jerome Powell said last Wednesday that a "really strong" U.S. economy is likely to continue growing, but softness in housing and high levels of corporate debt have caught the Federal Reserve's eye. "The market's interpretations of those comments were very dovish," said Thomas Simons, a money market economist at Jefferies in New York. Market direction was constrained on Monday with no main catalysts to drive direction before the U.S. Thanksgiving holiday and with no major economic events or no new supply. "Very little data, no nominal supply, holiday shortened week. It all kind of adds up to no good reason to do anything unless there are headlines that come across that change the narrative," said Simons. The bond market will be closed on Thursday for Thanksgiving and will close early on Friday. Investors also remained focused on headlines around trade and Britain's exit from the European Union. (Editing by Jeffrey Benkoe) )

TREASURIES-Yields rise as equity recovery prompts risk-on

31 Oct 2018

* ADP jobs data better than expected (Recasts, updates yields, market activity and comments)

TREASURIES-Yields rise on strong jobs data, as stocks gain

31 Oct 2018

NEW YORK, Oct 31 U.S. Treasury yields rose on Wednesday after ADP jobs data for October boosted expectations for a strong employment report on Friday, while stronger stock markets reduced safe haven demand for U.S. government debt.

CORRECTED-TREASURIES-U.S. yields fall to three-week lows as equities tumble

26 Oct 2018

(Corrects prices in paragraphs 10 and 11) * Treasury moves taking cues from stocks * Consumer spending boosts third-quarter GDP * Oil price drop reduces inflation expectations By Karen Brettell NEW YORK, Oct 26 U.S. Treasury yields dropped to three-week lows on Friday as stocks sank in volatile trading, boosting demand for safe-haven government debt. Disappointing earnings reports from Amazon.com Inc and Alphabet Inc rekindled a rush to dump technology and high-growth stocks. Stock markets around the world were on track for their longest weekly losing streak since 2013. “It’s a global flight to safety," said Collin Martin, director, fixed income, at the Schwab Center for Financial Research in New York. Treasuries have largely moved in lock-step with stocks this week, with yields rising and falling with equity prices. “At this point, the rout in equities and broader deterioration in risk sentiment seems to be the primary driver of the rally in Treasuries,” said Jonathan Cohn, an interest rate strategist at Credit Suisse in New York. A drop in oil prices this month is also a large factor behind bond strength, because it has reduced inflation expectations. “This has been a move driven by inflation expectations primarily,” said Cohn. U.S. crude prices were trading at $67.52 on Friday, from $76.90 on Oct. 3. Benchmark 10-year Treasury yields fell as low as 3.057 percent on Friday, the lowest level since Oct. 3, before rising back to 3.083 percent. The yields are down from a more than seven-year high of 3.261 percent hit on Oct. 9. Oil hit its highest level since 2014 on Oct. 3, which was the same day that Treasury yields broke above their then-range on the way to the recent high. There is speculation that if the weakness in equity markets persists, it could derail the Federal Reserve’s plans to further hike interest rate. Loretta Mester, president of the Cleveland Fed, said on Thursday that the recent cratering of stock markets is nowhere near severe enough to rattle confidence and significantly hurt U.S. business and consumer spending. The Commerce Department on Friday reported that third-quarter gross domestic product increased at an annualized rate of 3.5 percent, slowing less than expected as a tariff-related drop in soybean exports partially offset by the strongest consumer spending in nearly a four years and a surge in inventory investment. “It was a pretty good GDP result on balance,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott in Philadelphia. “It seems like the Treasury markets are taking this as modestly economically positive, bond negative.” (Reporting by Karen Brettell Additional reporting by Sinéad Carew in New York Editing by Leslie Adler) )

TREASURIES-Yields fall to three week lows as equities tumble

26 Oct 2018

NEW YORK, Oct 26 U.S. Treasury yields tumbled to three week lows on Friday as stocks sank in volatile trading, boosting demand for safe haven debt.

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