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Speculators pare U.S. 10-year T-note net shorts before Fed minutes

19 Oct 2018

Speculators' net bearish bets on U.S. 10-year Treasury note futures fell a tad earlier this week before Federal Reserve's release of minutes from its policy meeting last month, according to Commodity Futures Trading Commission data released on Friday.

UPDATE 1-Speculators pare U.S. 10-year T-note net shorts before Fed minutes

19 Oct 2018

* Speculators raise ultra bond net shorts to record high * Fund managers raise net longs in 10-year T-notes * Speculative net shorts in Eurodollar, fed funds increase (Adds details on Fed minutes, market background, other data) By Richard Leong Oct 19 Speculators' net bearish bets on U.S. 10-year Treasury note futures fell a tad earlier this week before Federal Reserve's release of minutes from its policy meeting last month, according to Commodity Futures Trading Commission data released on Friday. The Treasuries market had stabilized earlier this week from heavy losses in the previous two weeks due to jitters about rising inflation and a faster pace of interest rate increases from the Federal Reserve. The Fed's record of its Sept. 25-26 meeting suggested a few policymakers are open to raising short-term interest rates above a "neutral" level as the economy has been growing faster than their forecast. The latest minutes sparked a dramatic selloff in the money markets that caused a sharp spike in key short-term rates on Thursday. Bond yields however were buffered by safe-haven demand from losses on Wall Street. The amount of speculators' bearish, or short, positions in 10-year Treasury futures exceeded bullish, or long, positions by 615,970 contracts on Oct. 16, according to the CFTC's latest Commitments of Traders data. A week earlier, speculators held 622,422 net short positions in 10-year T-note futures. In addition to the FOMC minutes, big swings in global equity prices and worries about Italy's budget, Brexit negotiations and strained relations between United States and Saudi Arabia have stoked volatility in the bond market the latter part of this week, analysts said. On Friday, benchmark 10-year Treasury yield ended up 2 basis points at 3.196 percent, holding below the 7-1/2 year high of 3.261 percent reached last week. By investor groups, asset managers increased their net longs in 10-year T-notes to 987,547 contracts, while hedge funds raised their net 10-year T-note shorts to 833,471 contracts. Bond dealers' 10-year net shorts slipped to 231,145 from prior week's 232,818, which was the highest level since late August, CFTC data showed. Among other bond contracts, speculative net shorts in ultra bonds reached a record peak of 244,975 contracts on Tuesday. On the other hand, speculators pared their T-bond net shorts to 103,937 contracts from previous week's 138,382, which was the highest since June 2007. Among interest rate futures, speculators rebuilt their net shorts in Eurodollar to 2.59 million contracts from 2.47 million contracts which were the fewest since late December. They increased their net shorts in federal funds for first time in four weeks to 30,038 contracts. Below is a table of the speculative positions in Treasury futures on the Chicago Board of Trade and in Eurodollar futures on the Chicago Mercantile Exchange in the latest week: U.S. 2-year T-notes (Contracts of $200,000) 16 Oct 2018 Prior week week Long 516,076 486,355 Short 775,792 729,919 Net -259,716 -243,564 U.S. 5-year T-notes (Contracts of $100,000) 16 Oct 2018 Prior week week Long 583,109 556,118 Short 1,402,950 1,416,058 Net -819,841 -859,940 U.S. 10-year T-notes (Contracts of $100,000) 16 Oct 2018 Prior week week Long 555,950 544,866 Short 1,171,920 1,167,288 Net -615,970 -622,422 U.S. T-bonds (Contracts of $100,000) 16 Oct 2018 Prior week week Long 144,936 136,538 Short 248,873 274,920 Net -103,937 -138,382 U.S. Ultra T-bonds (Contracts of $100,000) 16 Oct 2018 Prior week week Long 97,082 107,208 Short 342,057 333,363 Net -244,975 -226,155 Eurodollar (Contracts of $1,000,000) 16 Oct 2018 Prior week week Long 961,917 1,013,511 Short 3,553,958 3,484,493 Net -2,592,041 -2,470,982 Fed funds (Contracts of $1,000,000) 16 Oct 2018 Prior week week Long 193,836 206,728 Short 223,874 219,578 Net -30,038 -12,850 (Reporting by Richard Leong in New York Editing by Nick Zieminski and Matthew Lewis)

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.

TREASURIES OUTLOOK-U.S. yields rise as hopes for Italy pare safety bids

19 Oct 2018

* Wall Street bounce fades despite upbeat earnings * Italian yields fall on EU Moscovici's remarks * U.S. to sell $108 bln in fixed-rate debt next week * Fed's Kaplan sees 2-3 more rate hikes to "neutral" (Repeats to additional subscribers) By Richard Leong NEW YORK, Oct 19 U.S. Treasury yields rose on Friday, with the 10-year yield hovering near a one-week high as traders pared safe-haven bond positions stemming from hopes for reduced tension between Italy and the European Commission over the country's debt-laden budget. Major U.S. stock indexes also lifted bond yields higher on strong corporate earnings. They offset worries about rising borrowing costs, U.S.-China trade tensions and strained relations between United States and Saudi Arabia. Yields on Italian government debt fell after European Economic Affairs Commissioner Pierre Moscovici said he wanted to reduce tensions with Italy over the country's contentious budget plans. Earlier on Friday, the 10-year Italian yield retreated to 3.57 percent from a 4-1/2 year peak at 3.78 percent. The drop in Italian yields helped raise yields on U.S. and German debt. "That gave the market some relief," Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York said of the latest development between EC and Italy. "That took some of the safe-haven bids out of the market." Benchmark 10-year Treasury yield yield was 3.200 percent, up over 2 basis point from Thursday when it reached a one-week peak of 3.179 percent. Last week, it reached a 7-1/2 year peak of 3.261 percent. The Dow gained 0.20 percent and the S&P 500 rose 0.20 percent. On Thursday, Wall Street share prices tumbled partly on disappointing results from industrial companies. The Treasury market was roiled this week after the Federal Reserve released minutes on its Sept. 25-26 policy meeting. Central bankers raised borrowing costs a quarter point, and analysts said some traders dumped interest rate futures after the minutes suggested some policy makers were open to raising short-term interest rates above the "neutral" level of 3 percent. On Friday, Dallas Fed President Robert Kaplan said the U.S. economy is "basically" meeting the Fed's mandate on employment and inflation. He said at an event sponsored by the Manhattan Institute another two to three more rate increases would bring borrowing costs into "neutral" territory where it's neither stimulating nor restricting U.S. economic growth. Technical indicators suggest Treasuries are oversold, but the market faces supply pressure next week due to a planned auction of a combined $108 billion in two-year, five-year and seven-year fixed-rate U.S. government debt. "These yield levels are probably not going to hold given the sheer amount of supply next week," Milstein said. Earlier Friday, the National Association of Realtors said U.S. home resales fell in September for a sixth straight months. October 19 Friday 3:32PM EDT/ 1932 GMT Price US T BONDS DEC8 137-24/32 -0-12/32 10YR TNotes DEC8 117-248/256 -0-44/256 Price Current Net Yield % Change (bps) Three-month bills 2.265 2.3091 -0.001 Six-month bills 2.41 2.4729 0.007 Two-year note 99-178/256 2.9122 0.038 Three-year note 99-174/256 2.988 0.031 Five-year note 99-48/256 3.0532 0.029 Seven-year note 99-36/256 3.1386 0.026 10-year note 97-72/256 3.1996 0.025 30-year bond 92-212/256 3.3837 0.026 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 20.25 -2.25 spread U.S. 3-year dollar swap 18.50 -1.50 spread U.S. 5-year dollar swap 14.25 -0.75 spread U.S. 10-year dollar swap 6.50 -0.25 spread U.S. 30-year dollar swap -8.50 0.00 spread (Reporting by Richard Leong; Editing by David Gregorio and Grant McCool)

TREASURIES-U.S. yields rise as hopes for Italy pare safety bids

19 Oct 2018

* Wall Street bounce fades despite upbeat earnings * Italian yields fall on EU Moscovici's remarks * U.S. to sell $108 bln in fixed-rate debt next week * Fed's Kaplan sees 2-3 more rate hikes to "neutral" (Updates market action, adds quote) By Richard Leong NEW YORK, Oct 19 U.S. Treasury yields rose on Friday, with the 10-year yield hovering near a one-week high as traders pared safe-haven bond positions stemming from hopes for reduced tension between Italy and the European Commission over the country's debt-laden budget. Major U.S. stock indexes also lifted bond yields higher on strong corporate earnings. They offset worries about rising borrowing costs, U.S.-China trade tensions and strained relations between United States and Saudi Arabia. Yields on Italian government debt fell after European Economic Affairs Commissioner Pierre Moscovici said he wanted to reduce tensions with Italy over the country's contentious budget plans. Earlier on Friday, the 10-year Italian yield retreated to 3.57 percent from a 4-1/2 year peak at 3.78 percent. The drop in Italian yields helped raise yields on U.S. and German debt. "That gave the market some relief," Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York said of the latest development between EC and Italy. "That took some of the safe-haven bids out of the market." Benchmark 10-year Treasury yield yield was 3.200 percent, up over 2 basis point from Thursday when it reached a one-week peak of 3.179 percent. Last week, it reached a 7-1/2 year peak of 3.261 percent. The Dow gained 0.20 percent and the S&P 500 rose 0.20 percent. On Thursday, Wall Street share prices tumbled partly on disappointing results from industrial companies. The Treasury market was roiled this week after the Federal Reserve released minutes on its Sept. 25-26 policy meeting. Central bankers raised borrowing costs a quarter point, and analysts said some traders dumped interest rate futures after the minutes suggested some policy makers were open to raising short-term interest rates above the "neutral" level of 3 percent. On Friday, Dallas Fed President Robert Kaplan said the U.S. economy is "basically" meeting the Fed's mandate on employment and inflation. He said at an event sponsored by the Manhattan Institute another two to three more rate increases would bring borrowing costs into "neutral" territory where it's neither stimulating nor restricting U.S. economic growth. Technical indicators suggest Treasuries are oversold, but the market faces supply pressure next week due to a planned auction of a combined $108 billion in two-year, five-year and seven-year fixed-rate U.S. government debt. "These yield levels are probably not going to hold given the sheer amount of supply next week," Milstein said. Earlier Friday, the National Association of Realtors said U.S. home resales fell in September for a sixth straight months. October 19 Friday 3:32PM EDT/ 1932 GMT Price US T BONDS DEC8 137-24/32 -0-12/32 10YR TNotes DEC8 117-248/256 -0-44/256 Price Current Net Yield % Change (bps) Three-month bills 2.265 2.3091 -0.001 Six-month bills 2.41 2.4729 0.007 Two-year note 99-178/256 2.9122 0.038 Three-year note 99-174/256 2.988 0.031 Five-year note 99-48/256 3.0532 0.029 Seven-year note 99-36/256 3.1386 0.026 10-year note 97-72/256 3.1996 0.025 30-year bond 92-212/256 3.3837 0.026 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 20.25 -2.25 spread U.S. 3-year dollar swap 18.50 -1.50 spread U.S. 5-year dollar swap 14.25 -0.75 spread U.S. 10-year dollar swap 6.50 -0.25 spread U.S. 30-year dollar swap -8.50 0.00 spread (Reporting by Richard Leong; Editing by David Gregorio and Grant McCool)

TREASURIES-U.S. yields rise; selling spurred by Wall Street gains, hopes for Italy

19 Oct 2018

* Wall Street rebounds after sharp losses on Thursday * Italian yields fall on EU Moscovici's remarks * U.S. to sell $108 bln in fixed-rate debt next week * U.S. existing home sales for sixth straight month (New throughout, updates prices, yields, market activity and comments) By Richard Leong NEW YORK, Oct 19 U.S. Treasury yields rose on Friday, with the 10-year yield hovering near a one-week high as traders pared safe-haven bond positions on a recovery in Wall Street stocks and hopes for reduced tension between Italy and the European Commission. Major U.S. stock indexes rose as strong corporate earnings offset worries about rising borrowing costs, U.S.-China trade tensions and strained relations between United States and Saudi Arabia. On Thursday, Wall Street share prices tumbled partly on disappointing results from industrial companies. Kevin Giddis, head of fixed income capital markets with Raymond James in Memphis, Tennessee, said that despite Friday's rebound on Wall Street, investors remain on edge which could spur more bond buying in the near future. "The story of fear seems to be in place right now as investors fear not only interest rates and the Fed, they are now fearing forward earnings," said Kevin Giddis, head of fixed income capital markets with Raymond James in Memphis, Tennessee. Yields on Italian government debt fell after European Economic Affairs Commissioner Pierre Moscovici said he wanted to reduce tensions with Italy over the country's contentious budget plans. The drop in Italian yields helped raise yields on U.S. and German debt. At 11:25 a.m. EDT (1525 GMT), benchmark 10-year Treasury yield yield was 3.196 percent, up 2 basis point from Thursday when it reached a one-week peak of 3.179 percent. Last week, it reached a 7-1/2 year peak of 3.261 percent. The Dow was up 0.49 percent and the S&P 500 was up 0.59 percent. The Treasury market was roiled this week after the Federal Reserve released minutes on its Sept. 25-26 policy meeting. Central bankers raised borrowing costs a quarter point, and analysts said some traders dumped interest rate futures after the minutes suggested some policy makers were open to raising short-term interest rates above the "neutral" level of 3 percent. Technical indicators suggest Treasuries are oversold, but the market faces supply pressure next week due to a planned auction of a combined $108 billion in two-year, five-year and seven-year fixed-rate U.S. government debt. "What I do know is that the bond market is somewhat oversold, but it may not find many buyers until more data is released, a geopolitical event gets our attention, or the Fed changes its view on forward monetary policy," Giddis said. Earlier Friday, the National Association of Realtors said U.S. home resales fell in September for a sixth straight months. October 19 Friday 11:26AM EDT/ 1526 GMT Price US T BONDS DEC8 137-27/32 -0-9/32 10YR TNotes DEC8 117-252/256 -0-40/256 Price Current Net Yield % Change (bps) Three-month bills 2.265 2.3091 -0.001 Six-month bills 2.41 2.4729 0.007 Two-year note 99-184/256 2.8996 0.026 Three-year note 99-180/256 2.9797 0.023 Five-year note 99-52/256 3.0498 0.026 Seven-year note 99-44/256 3.1335 0.021 10-year note 97-80/256 3.1958 0.021 30-year bond 92-248/256 3.3758 0.018 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 21.00 -1.50 spread U.S. 3-year dollar swap 19.00 -1.00 spread U.S. 5-year dollar swap 14.50 -0.50 spread U.S. 10-year dollar swap 6.50 -0.25 spread U.S. 30-year dollar swap -8.25 0.25 spread (Reporting by Richard Leong; Editing by David Gregorio)

UPDATE 1-Money markets show strain with more Federal Reserve rate rises ahead

18 Oct 2018

* Fed funds/IOER spread contracts to tightest ever at 1 bps (Adds background, quotes, graphics)

TREASURIES-U.S. yields fall as stock losses offset rate-hike worries

18 Oct 2018

* FOMC Sept minutes hint at further U.S. rate increases * Draghi's warning, Mnuchin pullout from summit weigh * U.S. Treasury sells $5 bln 30-year TIPS to soft demand * U.S. to sell $108 bln in fixed-rate debt next week (Repeats to additional subscribers) By Richard Leong NEW YORK, Oct 18 U.S. Treasury yields slipped on Thursday as safe-haven demand fueled by more losses on Wall Street mitigated selling tied to worries about further interest rate increases from the Federal Reserve. Jitters about more Fed rate hikes propelled the 10-year yield to a one-week high and spurred selling in short-term rate futures, raising borrowing costs in money markets. "While there were no surprises, this was a reaffirmation of the hawkish rhetoric from Fed officials we have been hearing the past several weeks," said Subadra Rajappa, head of U.S. rates strategy at SG Corporate & Investment Banking in New York. On Wednesday, the Fed released the minutes from its Sept. 25-26 policy meeting, when central bank officials agreed to increase borrowing costs by a quarter point to 2.00-2.25 percent. The minutes suggested they assessed the pace of economic growth might be strong enough to raise rates more than what some traders had thought. An initial rise in Treasury yields on Thursday faded as more than 1 percent drops in major U.S. stock indexes accelerated on rate-hike worries and disappointing earnings from several industrial companies. Rising borrowing costs have raised concerns about their effect on corporate profits and household finances. Key rates on short-term loans have reached their highest levels in a decade. A warning from European Central Bank President Mario Draghi about undermining the European Union's budget rules, and U.S. Treasury Secretary Steven Mnuchin's withdrawal from an investment summit in Saudi Arabia next week, also weighed on investor sentiment toward holding risky assets, analysts said. Fed policy-makers' view was supported by data on Thursday that showed the number of Americans on jobless rolls fell to levels last seen in 1973, suggesting a further tightening in the labor market. The benchmark 10-year Treasury yield was 3.173 percent, 0.6 basis point lower than late Wednesday. It reached a one-week peak of 3.179 percent earlier Thursday, which was below a 7-1/2 year peak of 3.261 percent reached last week. The Dow and S&P 500 were down 1.22 percent and 1.32 percent, respectively. The 30-year yield was the exception among maturities. It was 3.357 percent, up about 1 basis from late Wednesday following weak demand at a $5 billion auction of 30-year Treasury Inflation Protected Securities (TIPS). Next week, the Treasury Department will sell a combined $108 billion in two-year, five-year and seven-year fixed-rate government debt. October 18 Thursday 2:54PM EDT/ 1854 GMT Price US T BONDS DEC8 138-4/32 -0-1/32 10YR TNotes DEC8 118-36/256 0-24/256 Price Current Net Yield % Change (bps) Three-month bills 2.265 2.3095 0.000 Six-month bills 2.4025 2.4657 0.000 Two-year note 99-196/256 2.8741 -0.008 Three-year note 99-196/256 2.9574 -0.014 Five-year note 99-82/256 3.0237 -0.017 Seven-year note 99-76/256 3.1131 -0.013 10-year note 97-124/256 3.1748 -0.004 30-year bond 93-72/256 3.3582 0.012 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 22.25 2.25 spread U.S. 3-year dollar swap 19.75 2.00 spread U.S. 5-year dollar swap 15.00 2.00 spread U.S. 10-year dollar swap 6.75 1.00 spread U.S. 30-year dollar swap -8.75 -0.25 spread (Reporting by Richard Leong; Editing by Dan Grebler and Nick Zieminski)

TREASURIES-U.S. yields fall as stock losses offset rate-hike worries

18 Oct 2018

* FOMC Sept minutes hint at further U.S. rate increases * Draghi's warning, Mnuchin pullout from summit weigh * U.S. Treasury sells $5 bln 30-year TIPS to soft demand * U.S. to sell $108 bln in fixed-rate debt next week (Updates to late afternoon market action) By Richard Leong NEW YORK, Oct 18 U.S. Treasury yields slipped on Thursday as safe-haven demand fueled by more losses on Wall Street mitigated selling tied to worries about further interest rate increases from the Federal Reserve. Jitters about more Fed rate hikes propelled the 10-year yield to a one-week high and spurred selling in short-term rate futures, raising borrowing costs in money markets. "While there were no surprises, this was a reaffirmation of the hawkish rhetoric from Fed officials we have been hearing the past several weeks," said Subadra Rajappa, head of U.S. rates strategy at SG Corporate & Investment Banking in New York. On Wednesday, the Fed released the minutes from its Sept. 25-26 policy meeting, when central bank officials agreed to increase borrowing costs by a quarter point to 2.00-2.25 percent. The minutes suggested they assessed the pace of economic growth might be strong enough to raise rates more than what some traders had thought. An initial rise in Treasury yields on Thursday faded as more than 1 percent drops in major U.S. stock indexes accelerated on rate-hike worries and disappointing earnings from several industrial companies. Rising borrowing costs have raised concerns about their effect on corporate profits and household finances. Key rates on short-term loans have reached their highest levels in a decade. A warning from European Central Bank President Mario Draghi about undermining the European Union's budget rules, and U.S. Treasury Secretary Steven Mnuchin's withdrawal from an investment summit in Saudi Arabia next week, also weighed on investor sentiment toward holding risky assets, analysts said. Fed policy-makers' view was supported by data on Thursday that showed the number of Americans on jobless rolls fell to levels last seen in 1973, suggesting a further tightening in the labor market. The benchmark 10-year Treasury yield was 3.173 percent, 0.6 basis point lower than late Wednesday. It reached a one-week peak of 3.179 percent earlier Thursday, which was below a 7-1/2 year peak of 3.261 percent reached last week. The Dow and S&P 500 were down 1.22 percent and 1.32 percent, respectively. The 30-year yield was the exception among maturities. It was 3.357 percent, up about 1 basis from late Wednesday following weak demand at a $5 billion auction of 30-year Treasury Inflation Protected Securities (TIPS). Next week, the Treasury Department will sell a combined $108 billion in two-year, five-year and seven-year fixed-rate government debt. October 18 Thursday 2:54PM EDT/ 1854 GMT Price US T BONDS DEC8 138-4/32 -0-1/32 10YR TNotes DEC8 118-36/256 0-24/256 Price Current Net Yield % Change (bps) Three-month bills 2.265 2.3095 0.000 Six-month bills 2.4025 2.4657 0.000 Two-year note 99-196/256 2.8741 -0.008 Three-year note 99-196/256 2.9574 -0.014 Five-year note 99-82/256 3.0237 -0.017 Seven-year note 99-76/256 3.1131 -0.013 10-year note 97-124/256 3.1748 -0.004 30-year bond 93-72/256 3.3582 0.012 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 22.25 2.25 spread U.S. 3-year dollar swap 19.75 2.00 spread U.S. 5-year dollar swap 15.00 2.00 spread U.S. 10-year dollar swap 6.75 1.00 spread U.S. 30-year dollar swap -8.75 -0.25 spread (Reporting by Richard Leong; Editing by Dan Grebler and Nick Zieminski)

TREASURIES-U.S. yields dip as stock losses offset rate-hike worries

18 Oct 2018

* FOMC Sept minutes hint at further U.S. rate increases * Draghi's warning, Mnuchin pullout from summit weigh * U.S. Treasury to sell $5 bln 30-year TIPS at 1 p.m. * U.S. to sell $108 bln in fixed-rate debt next week (Updates market action, adds quote) By Richard Leong NEW YORK, Oct 18 U.S. Treasury yields edged lower on Thursday as safe-haven demand fueled by more losses on Wall Street mitigated selling tied to worries about further interest rate increases from the Federal Reserve. Jitters about more Fed rate hikes propelled the 10-year yield to a one-week high and spurred selling in short-term rate futures, raising borrowing costs in money markets. "While there were no surprises, this was a reaffirmation of the hawkish rhetoric from Fed officials we have been hearing the past several weeks," said Subadra Rajappa, head of U.S. rates strategy at SG Corporate & Investment Banking in New York. On Wednesday, the Fed released the minutes from its Sept. 25-26 policy meeting, when central bank officials agreed to increase borrowing costs by a quarter point to 2.00-2.25 percent. The minutes suggested they assessed the pace of economic growth might be strong enough to raise rates more than what some traders had thought. An initial rise in Treasury yields on Thursday faded as more than 1 percent drops in major U.S. stock indexes accelerated on rate-hike worries and disappointing earnings from several industrial companies. A warning from European Central Bank President Mario Draghi about undermining the European Union's budget rules and U.S. Treasury Secretary Steven Mnuchin's withdrawal from an investment summit in Saudi Arabia next week also weighed on investor sentiments toward holding risky assets, analysts said. Fed policy-makers' view was supported by data on Thursday that showed the number of Americans on jobless rolls fell to levels last seen in 1973, suggesting a further tightening in the labor market. Shortly before 12:30 p.m. (1630 GMT), the benchmark 10-year Treasury yield was 3.181 percent, 0.6 basis point lower than late Wednesday. It reached a one-week peak of 3.179 percent earlier Thursday, which was below a 7-1/2 year peak of 3.261 percent reached last week. The 30-year yield was 3.360 percent, up marginally from late Wednesday. The Dow and S&P 500 were down 1.10 percent and 1.31 percent, respectively. On the supply front, the Treasury Department will sell a combined $108 billion in two-year, five-year and seven-year fixed-rate government debt supply next week. At 1 p.m. (1300 GMT), the Treasury is scheduled to sell $5 billion in 30-year Treasury Inflation Protected Securities . October 18 Thursday 12:13PM EDT/ 1613 GMT Price US T BONDS DEC8 138-8/32 0-3/32 10YR TNotes DEC8 118-40/256 0-28/256 Price Current Net Yield % Change (bps) Three-month bills 2.2675 2.3121 0.002 Six-month bills 2.405 2.4682 0.002 Two-year note 99-196/256 2.8741 -0.008 Three-year note 99-196/256 2.9574 -0.014 Five-year note 99-82/256 3.0237 -0.017 Seven-year note 99-80/256 3.1106 -0.015 10-year note 97-132/256 3.171 -0.008 30-year bond 93-112/256 3.3495 0.003 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 22.00 2.00 spread U.S. 3-year dollar swap 19.75 2.00 spread U.S. 5-year dollar swap 15.00 2.00 spread U.S. 10-year dollar swap 6.50 0.75 spread U.S. 30-year dollar swap -8.50 0.00 spread (Reporting by Richard Leong; Editing by Dan Grebler)

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