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Ross Kerber

U.S. Treasury to sell $112 billion next week, continue shift to longer-dated debt

05 Aug 2020

BOSTON The U.S. Treasury Department said on Wednesday it will sell $112 billion next week in notes and bonds and that it plans to continue to shift more of its funding to longer-dated debt in coming quarters, as it finances measures to offset the impact of the COVID-19 epidemic.

U.S. Treasury to continue shift to longer-dated debt

05 Aug 2020

BOSTON, Aug 5 The U.S. Treasury Department said on Wednesday it plans to continue a shift to longer-term notes and bonds as it issues debt in coming quarters to fund measures to offset the impact of the COVID-19 epidemic.

U.S. long bond demand raises prospect of whole curve yielding below 1%

03 Aug 2020

BOSTON/CHICAGO, August 3 A decline in U.S. Treasury yields over recent weeks has investors eyeing the approach of an unusual phenomenon - the entire U.S. yield curve sinking below 1%.

TREASURIES-Longer-term yields rise, steepen yield curve

31 Jul 2020

(Updates with market activity, status of aid talks in Washington) By Ross Kerber July 31 Longer-term U.S. Treasury yields rose off near-record lows on Friday, but caution held back shorter-term rates and steepened the yield curve as talks in Washington on a new coronavirus aid bill continued. The benchmark 10-year yield was up 1.3 basis points at 0.5543% in afternoon trading after reaching as low as 52 basis points, the least since March. The gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 43 basis points, about a basis point above Thursday's close and well above the 40 basis point level it touched earlier Friday. Stock indexes had opened higher based on strong earnings from top technology companies, then fell on continuing economic concerns. In Washington, negotiations over another coronavirus relief bill continued and U.S. House of Representatives Speaker Nancy Pelosi said talks with the White House were not yet on a path toward reaching a deal, hours before the expiration of federal unemployment benefits. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was almost unchanged at 0.1172% and remained close to its all-time low of 0.105% reached on May 8. The economy as a whole is unlikely to improve until public health issues stemming from the COVID-19 pandemic are resolved, said Raymond James market strategist Ellis Phifer. Early signs of an economic comeback proved premature as virus cases have continued rise and kept people at home. "That's bad for the economy since we're consumer driven," Phifer said. The Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 5.6% last month after a record 8.5% jump in May as more businesses reopened. The data was included in Thursday's advance gross domestic product report for the second quarter, which showed the economy shrinking at a record 32.9% annualized rate as consumer spending tanked at a historic 34.6% pace. The United States leads the world in COVID-related fatalities with more than 150,000 in five months. July 31 Friday 1:55PM New York / 1755 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0925 0.0938 -0.002 Six-month bills 0.1025 0.1043 0.000 Two-year note 100-4/256 0.1172 -0.004 DThree-year note 99-254/256 0.1277 -0.008 Five-year note 100-30/256 0.2264 -0.004 Seven-year note 99-204/256 0.4045 0.004 10-year note 100-172/256 0.5543 0.013 20-year bond 102-80/256 0.9959 0.022 30-year bond 100-200/256 1.2186 0.022 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.00 0.50 spread U.S. 3-year dollar swap 6.00 0.50 spread U.S. 5-year dollar swap 4.25 0.50 spread U.S. 10-year dollar swap -1.00 0.00 spread U.S. 30-year dollar swap -42.75 -1.00 spread (Reporting by Ross Kerber in Boston Editing by Nick Zieminski and Cynthia Osterman)

TREASURIES-Longer-term yields rise with stock gains

31 Jul 2020

By Ross Kerber July 31 Longer-term U.S. Treasury yields rose on Friday as traders moved into stocks, but caution held back shorter-term rates and steepened the yield curve. The benchmark 10-year yield was up 2.1 basis points at 0.5625% in morning trading. The gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 44 basis points, about a basis point above Thursday's close and well above the 40 basis point level it touched early Friday morning. The risk-on movement came as stock indexes opened higher based on strong earnings from top technology companies. But the two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was almost unchanged at 0.1191% and remained close to its all-time low of 0.105% reached on May 8. The economy as a whole is unlikely to improve until public health issues stemming from the COVID-19 pandemic are resolved, said Raymond James market strategist Ellis Phifer. Early signs of an economic comeback proved premature as virus cases have continued rise and kept people at home. "That's bad for the economy since we're consumer driven," Phifer said. The Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 5.6% last month after a record 8.5% jump in May as more businesses reopened. The data was included in Thursday's advance gross domestic product report for the second quarter, which showed the economy shrinking at a record 32.9% annualized rate as consumer spending tanked at a historic 34.6% pace. The United States leads the world in COVID-related fatalities with more than 150,000 in five months. In Washington negotiations over another coronavirus relief bill continued and the No. 2 Democrat in the U.S. House of Representatives said a federal jobless benefit was set to expire on Friday with no sign of a deal. July 31 Friday 9:53AM New York / 1353 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0925 0.0938 -0.002 Six-month bills 0.1 0.1017 -0.002 Two-year note 100-3/256 0.1191 -0.002 DThree-year note 99-250/256 0.133 -0.003 Five-year note 100-16/256 0.2374 0.007 Seven-year note 99-188/256 0.4136 0.013 10-year note 100-152/256 0.5625 0.021 20-year bond 102-52/256 1.0019 0.028 30-year bond 100-124/256 1.2305 0.033 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.00 0.50 spread U.S. 3-year dollar swap 6.00 0.50 spread U.S. 5-year dollar swap 4.00 0.25 spread U.S. 10-year dollar swap -1.00 0.00 spread U.S. 30-year dollar swap -42.75 -1.00 spread (Reporting by Ross Kerber in Boston Editing by Nick Zieminski)

Top fund firms oppose planned U.S. roadblock to green retirement funds

31 Jul 2020

BOSTON Top asset managers including Vanguard Group, State Street Corp and Franklin Resources have urged the Trump administration to reconsider proposed investment rules that would make it harder for retirement plans to use socially focused funds like those that invest in renewable energy.

TREASURIES-Poor economic data, Trump tweet send yields to lowest in months

30 Jul 2020

(Updates with market activity, jobless claims data, analyst comment) By Ross Kerber July 30 Traders drove U.S. Treasury yields to their lowest in months on Thursday after data showed the U.S. economy contracted at its steepest pace in decades and President Donald Trump tweeted about delaying the Nov. 3 presidential election. The benchmark 10-year yield was down 3.8 basis points at 0.5429% in afternoon trading after going as far down as 0.538%, its lowest since March 9. Yields on other Treasuries also fell and the 5-year note hit an all-time low of 0.228% as investors sought the government bonds to protect against economic and political uncertainty. The pattern of the session was set in the morning when the Commerce Department said gross domestic product fell at a 32.9% annualized rate in the second quarter, largely in April after restaurants, bars and factories had to close to slow the spread of the COVID-19 pandemic. About the same time, the Labor Department said U.S. jobless claims rose to 1.434 million for the week of July 25, up from 1.422 million in the prior week. "People are worried that with the pickup in COVID the economy is moving backwards a step, and that's what drove them into the safe haven of bonds," said Andrew Richman, director of fixed income strategies for Truist/SunTrust Advisory Services. Soon after, at 8:46 a.m. EDT, Trump raised the possibility of delaying the nation's November presidential election. Trump, without evidence, repeated his claims of mail-in voter fraud and wrote on Twitter: "delay the election until people can properly, securely and safely vote???" Together the events turned investors more cautious, with major U.S. stock indexes lower. The economic data reinforced the inclination of the Federal Reserve to add to accommodative policy, while Trump's tweet cast doubt on whether the U.S. election will be conducted smoothly, market analysts said. "Certainly President Trump's tweet was read as a negative in the equity and bond markets. It created a risk-off trade," said Tom di Galoma, managing director of Seaport Global Holdings. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 42 basis points, about 2 basis points lower than Wednesday's close and well below its level of 68 basis points on June 5. The yield on the two-year note, seen as an indicator of inflation expectations, was down less than a basis point at 0.123% in afternoon trading. It reached as low as 0.117% at one point in the morning, close to its all-time low of 0.105% on May 8. July 30 Thursday 1:51PM New York / 1751 GMT Price US T BONDS SEP0 182-8/32 0-31/32 10YR TNotes SEP0 140 0-64/256 Price Current Net Yield % Change (bps) Three-month bills 0.095 0.0963 -0.005 Six-month bills 0.1025 0.1043 -0.008 Two-year note 100-1/256 0.123 -0.006 Three-year note 99-246/256 0.1383 -0.011 Five-year note 100-24/256 0.2311 -0.022 Seven-year note 99-208/256 0.4022 -0.032 10-year note 100-200/256 0.5429 -0.038 20-year bond 102-168/256 0.977 -0.045 30-year bond 101-76/256 1.1981 -0.046 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.50 -1.00 spread U.S. 3-year dollar swap 5.25 -1.00 spread U.S. 5-year dollar swap 3.75 -0.25 spread U.S. 10-year dollar swap -1.00 0.00 spread U.S. 30-year dollar swap -41.75 0.00 spread (Reporting by Ross Kerber in Boston; Editing by Andrea Ricci and Jonathan Oatis)

TREASURIES-Poor Q2 data, Trump tweet send yields to lowest in months

30 Jul 2020

By Ross Kerber July 30 Traders drove U.S. Treasury yields to their lowest in months on Thursday after data showed the U.S. economy contracted at its steepest pace in decades and President Donald Trump tweeted about delaying the upcoming election. The benchmark 10-year yield was down 4.1 basis points at 0.5397% in morning trading after reaching as low as 0.538%, its lowest since March 9. Yields on other Treasuries also fell as investors bought up the government bonds as safe havens against both economic and political uncertainty. Some of the decline came after the Commerce Department said gross domestic product fell at a 32.9% annualized rate in the second quarter, largely in April after restaurants, bars and factories had to shutter to slow the spread of the COVID-19 pandemic. Soon after, Trump raised the possibility of delaying the nation's November presidential election. Trump, without evidence, repeated his claims of mail-in voter fraud and wrote on Twitter: "delay the election until people can properly, securely and safely vote???" Both events turned investors more cautious, with major U.S. stock indexes opening lower. The economic data reinforced the inclination of the Federal Reserve to add to accommodative policy, said Priya Misra, head of global rates strategy for TD Securities. Meanwhile Trump's tweet cast doubt on whether the U.S. election will be conducted smoothly, market analysts said. "Certainly President Trump's tweet was read as a negative in the equity and bond markets. It created a risk-off trade," said Tom di Galoma, managing director of Seaport Global Holdings. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 42 basis points, about 2 basis points lower than Wednesday's close and well below its level of 68 basis points on June 5. July 30 Thursday 9:55AM New York / 1355 GMT Price Current Net Yield % Change (bps) Three-month bills 0.095 0.0963 -0.005 Six-month bills 0.1025 0.1043 -0.008 Two-year note 100-2/256 0.1211 -0.008 Three-year note 99-248/256 0.1356 -0.013 Five-year note 100-26/256 0.2296 -0.023 Seven-year note 99-212/256 0.3999 -0.034 10-year note 100-208/256 0.5397 -0.041 20-year bond 102-200/256 0.9702 -0.052 30-year bond 101-120/256 1.1913 -0.053 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.75 -0.75 spread U.S. 3-year dollar swap 5.75 -0.50 spread U.S. 5-year dollar swap 4.00 0.00 spread U.S. 10-year dollar swap -0.50 0.50 spread U.S. 30-year dollar swap -41.50 0.25 spread (Reporting by Ross Kerber in Boston; Editing by Andrea Ricci)

TREASURIES-Longer-term yields slightly higher after Fed meeting

29 Jul 2020

(Updates market activity; adds details from Federal Reserve, analyst comment) By Ross Kerber July 29 Longer-term U.S. Treasury yields moved slightly higher on Wednesday after the Federal Reserve renewed its pledge to keep interest rates near zero to help the economy recover from the COVID-19 pandemic. The benchmark 10-year yield was almost unchanged at 0.579%, while the yield on the 30-year note was up 1.9 basis points at 1.2424%. Fed policy makers made comments in line with market expectations in the statement issued at the end of their two-day meeting, including repeating a pledge to use the U.S. central bank's "full range of tools" to support the economy. Evercore ISI macro research analyst Stan Shipley said the Fed appeared to be waiting to judge the full impact of its actions to date, including the extension of credit facilities. "The Fed has done a lot and they have made sure that capital markets have not collapsed. Whether that’s going to be enough to give you stimulus amid the public health crisis, that’s an open question," Shipley said. The stakes for the central bank are high as recent data suggests a nascent economic recovery may have stalled and that declining trends in unemployment may have reversed. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 45 basis points, roughly a basis point higher than Tuesday's close but well off the level of 68 basis points reached on June 5. The five-year note was down 1.3 basis points at 0.2531%, after touching a record low of 0.252%. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 1.2 basis points at 0.1309% in afternoon trading. July 29 Wednesday 2:59PM New York / 1859 GMT Price Current Net Yield % Change (bps) Three-month bills 0.1 0.1014 -0.008 Six-month bills 0.11 0.1119 -0.012 Two-year note 99-253/256 0.1309 -0.012 Three-year note 99-238/256 0.1488 -0.016 Five-year note 99-252/256 0.2531 -0.013 Seven-year note 99-154/256 0.4328 -0.008 10-year note 100-112/256 0.579 -0.002 20-year bond 101-224/256 1.0201 0.012 30-year bond 100-48/256 1.2424 0.019 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.50 0.25 spread U.S. 3-year dollar swap 6.25 0.50 spread U.S. 5-year dollar swap 4.00 0.50 spread U.S. 10-year dollar swap -0.75 0.25 spread U.S. 30-year dollar swap -41.75 -0.75 spread (Reporting by Ross Kerber in Boston; Editing by Steve Orlofsky and Leslie Adler)

U.S. CEO-workers pay gap narrowed, then COVID-19 hit: union report

29 Jul 2020

BOSTON Top American chief executives on average made 264 times as much as their typical employee in 2019, narrower than the year before, a union report found, but the ratio is expected to rise "dramatically" due to COVID-19.

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