* Russia, Ukraine announce peace progress, triggering bond
* U.S. corporate supply a major factor in Treasury debt
By Gertrude Chavez-Dreyfuss
NEW YORK, Sept 3 Benchmark U.S. Treasury debt
yields rose to three-week highs on Wednesday, bolstered by a
slew of U.S. corporate bond supply and efforts from Russia and
Ukraine to end fighting.
U.S. 30-year Treasury bond yields also rose, hitting
two-week peaks, as the Russia-Ukraine diplomacy pacified
investors reeling from persistent global tensions this year.
Russian President Vladimir Putin said on Wednesday a deal to
end fighting in eastern Ukraine could be reached this week, a
clear attempt to show the West he was trying to deescalate the
conflict despite renewed shelling.
"There has been a step forward on this end," said David
Keeble, global head of interest rates strategy, at Credit
Agricole in New York. "Putin does seem to be making the right
noises and that hasn't been seen for a long, long time."
At the same time, Treasury yields were boosted by an
onslaught of U.S. corporate debt issuance in September, after a
quiet summer. There were about $21 billion in U.S. corporate
bond issues announced on Tuesday and more new deals were
identified on Wednesday, including a $1.25 billion bond issue
from Lowe's Cos.
U.S. corporate bond supply have pushed the entire yield
spectrum higher, Keeble said.
"The corporate supply calendar is pretty heavy," said
Keeble. "The docket is filling up quite quickly, as well, and
that is putting a little upward pressure on yields."
In mid-morning trading, U.S 10-year Treasury notes
were down 7/32 in price to yield 2.44 percent, up
from a yield of 2.42 percent late Tuesday. Yields earlier hit
2.46 percent, the highest since Aug 13.
U.S. 30-year Treasury bonds fell 12/32 in price
to yield 3.19 percent, up from 3.17 percent on Tuesday. Yields
climbed to 3.21 percent earlier in the session, a two-week peak.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick