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Ross Kerber

TREASURIES-Yields rise on vaccine optimism, ahead of Fed minutes

23 Nov 2020

(Updates market activity, Biden cabinet considerations, yield curve details) By Ross Kerber Nov 23 U.S. Treasury yields moved higher on Monday and the yield curve steepened as investors took encouragement from positive COVID-19 vaccine news and looked ahead to minutes from the U.S. Federal Reserve due later in the week. The benchmark 10-year yield was up 2.1 basis points at 0.8504% in early afternoon trading. 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 69 basis points, about 2 basis points higher than Friday's close. It was also closer to the high of 79 basis points reached on Nov. 10, the highest it has been since early 2018. Other parts of the yield curve traded in a similar pattern, including the spread between 5-year and 30-year notes, also up 2 basis points. Investors seemed to be moving out of ultra-safe U.S. Treasuries as stocks and commodities markets rose, said Subadra Rajappa, head of U.S. rates strategy for Societe Generale. They were also positioning ahead of minutes of the Fed's Open Markets Committee due on Wednesday, she said, and keeping an eye out for cabinet picks for financial roles by U.S. President-elect Joe Biden. "If there are any interesting or controversial picks that might create some volatility," Rajappa said. She added that seems unlikely, since Biden's nominees may have to be confirmed by a Republican-controlled Senate should they retain control of the upper house. In a note to clients on Monday, Cowen and Company analyst Jaret Seiberg said the firm sees former Fed chief Janet Yellen "as having the inside track" for the key role of U.S. Treasury secretary, after Biden suggested his pick would gain support from progressives and moderates. Progressives have been more skeptical of the other two leading candidates, Fed Governor Lael Brainard and Roger Ferguson, CEO of asset manager TIAA, he wrote. On Monday, Biden's transition team said he will nominate senior aide Anthony Blinken as U.S. secretary of state, elevating a former No. 2 at the State Department. Former Secretary of State John Kerry will be named climate czar. U.S. stock index futures rose early on Monday as hopes that the first COVID-19 vaccine could be available within weeks renewed bets on a swift economic recovery next year. U.S. healthcare workers and others recommended for the nation's first inoculations could start getting shots within a day or two of regulatory consent next month, a top official of the government's vaccine development effort said on Sunday. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was unchanged at 0.1634% in afternoon trading. November 23 Monday 12:27PM New York / 1727 GMT Price Current Net Yield % Change (bps) Three-month bills 0.07 0.071 0.003 Six-month bills 0.09 0.0913 -0.003 Two-year note 99-237/256 0.1634 0.000 Three-year note 100-26/256 0.2157 0.003 Five-year note 99-90/256 0.3828 0.007 Seven-year note 99-40/256 0.6245 0.016 10-year note 100-60/256 0.8504 0.021 20-year bond 100-104/256 1.3517 0.019 30-year bond 101-208/256 1.5492 0.018 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.75 0.00 spread U.S. 3-year dollar swap 8.00 0.00 spread U.S. 5-year dollar swap 6.75 0.25 spread U.S. 10-year dollar swap -0.50 0.00 spread U.S. 30-year dollar swap -31.75 0.25 spread (Reporting by Ross Kerber in Boston; Editing by Kirsten Donovan and Dan Grebler)

TREASURIES-Yields rise on vaccine optimism, ahead of Fed minutes

23 Nov 2020

By Ross Kerber Nov 23 U.S. Treasury yields moved higher on Monday and the yield curve steepened as investors took encouragement from positive COVID-19 vaccine news and looked ahead to minutes from the U.S. Federal Reserve due out later in the week. The benchmark 10-year yield was up 2.3 basis points at 0.8521% in morning trading. 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 69 basis points, about 3 basis points higher than Friday's close. Investors seemed to be moving out of ultra-safe U.S. Treasuries as stocks and commodities markets rose, said Subadra Rajappa, head of U.S. rates strategy for Societe Generale. They were also positioning ahead of minutes of the Fed's Open Markets Committee due out Wednesday, she said, and keeping an eye out for controversial cabinet picks by U.S. President-elect Joe Biden, who so far has signaled he will chose a relatively moderate lineup of top officials to run U.S. agencies. "If there are any interesting or controversial picks that might create some volatility," she said. She added that seems unlikely since Biden's nominees may have to be confirmed by a Republican-controlled Senate. On Sunday evening a person close to Biden's transition said he would pick senior aide Anthony Blinken as U.S. Secretary of State, elevating a former No. 2 at the State Department. U.S. stock index futures rose on Monday as hopes that the first COVID-19 vaccine could be available within weeks renewed bets of a swift economic recovery next year. U.S. healthcare workers and others recommended for the nation's first inoculations could start getting shots within a day or two of regulatory consent next month, a top official of the government's vaccine development effort said on Sunday. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down less than a basis point at 0.1614% in morning trading. November 23 Monday 8:54AM New York / 1354 GMT Price Current Net Yield % Change (bps) Three-month bills 0.07 0.071 0.003 Six-month bills 0.0925 0.0938 0.000 Two-year note 99-238/256 0.1614 -0.002 Three-year note 100-26/256 0.2157 0.003 Five-year note 99-88/256 0.3844 0.008 Seven-year note 99-34/256 0.628 0.020 10-year note 100-56/256 0.8521 0.023 20-year bond 100-96/256 1.3535 0.021 30-year bond 101-188/256 1.5524 0.021 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.00 0.25 spread U.S. 3-year dollar swap 8.25 0.25 spread U.S. 5-year dollar swap 7.00 0.50 spread U.S. 10-year dollar swap -0.25 0.25 spread U.S. 30-year dollar swap -31.75 0.25 spread (Reporting by Ross Kerber in Boston; Editing by Kirsten Donovan)

Investors say Fed 'backstops' removed by Treasury were little used but lifted confidence

20 Nov 2020

A surprise move on Thursday by the U.S. Treasury Department to withdraw hundreds of billions of dollars used to support corporate, municipal and other bonds ravaged by the COVID-19 pandemic has injected some new uncertainty in global markets, investors said.

ISS CEO Retelny sees staff growth after Boerse deal

19 Nov 2020

BOSTON/NEW YORK Institutional Shareholder Services Inc expects its staff to keep increasing at a clip of more than 10% a year even after its takeover by German stock exchange operator Deutsche Boerse AG, ISS' chief executive said on Thursday.

Limited impact seen from Trump investment ban on military-linked Chinese firms

17 Nov 2020

WASHINGTON/BOSTON President Donald Trump's directive barring U.S. investments in Chinese companies linked by Washington to China's military is unlikely to deal the firms a serious blow, experts said, due to its limited scope, uncertainty about the stance of the incoming Biden administration and already-scant holdings by U.S. funds.

U.N. envoy Carney backs annual investor votes on company climate plans

09 Nov 2020

LONDON/BOSTON U.N. climate envoy Mark Carney on Monday backed a push by investors to force companies to submit their climate change strategies to annual shareholder votes, saying such a mechanism could improve oversight of pledges to slash greenhouse gas emissions.

UPDATE 1-Moody's says U.S. election uncertainty "unlikely" to have big credit impact

04 Nov 2020

BOSTON, Nov 4 Debt rating agency Moody's Investors Service on Wednesday said that uncertainty over the outcome of the U.S. presidential election is "unlikely to have significant credit effects" even as votes continued to be counted in key states.

U.S. Treasury will keep shifting to longer-dated debt

04 Nov 2020

The U.S. Treasury Department said on Wednesday it will continue a shift to longer-term notes and bonds as it issues debt to fund measures to offset the impact of the COVID-19 epidemic.

Global investor group urges United States to rejoin Paris climate accord

04 Nov 2020

LONDON A group representing European and U.S. investors with a collective $30 trillion (£23 trillion) in assets urged the United States to quickly rejoin a global accord to tackle climate change on Wednesday, as a decision by President Donald Trump to leave the pact came into effect.

Analysis: Sustainable investing advocates hope for friendlier U.S. rules if Biden wins

03 Nov 2020

NEW YORK/BOSTON Progressive groups and investors hope Democratic presidential nominee Joe Biden can win on Tuesday and quickly end Trump administration rules that stifle their ability to pick stocks using environmental, social or governance factors, setting up a renewed fight with corporate groups that backed the changes.

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