NEW YORK, March 1 (Reuters) - U.S. interest rate swap
spreads widened on Thursday as U.S. Treasury yields eased
modestly, steadying after Tuesday's dramatic widening of swap
spreads when global equities prices fell and a consequent
safety bid pushed bond prices higher and yields lower.
News that the closely watched Institute for Supply
Management (ISM) index rose in February soothed worries that
the manufacturing sector was in recession, prompting stock
prices to erase most of their early sharp losses.
Consequently, much, though not all, of the bid for
safe-haven U.S. Treasuries dissipated.
The two-year swap spread widened to 40.50 on Thursday from
39.75 basis points on Wednesday, while the 10-year swap spread
widened to 54.75 on Thursday from 54.00 basis points on
Wednesday.
"It helps to realize (the recent) widening in credit
default swap spreads represent(s) little more than a correction
back to December levels," said Bernd Wuebben, relative value
U.S. interest-rate strategist at BNP Paribas.
Bonds
