November 29, 2016 / 8:40 PM / a year ago

TREASURIES-Yields edge lower on month-end buying after November selloff

* Month-end portfolio rebalancing pushes yields lower
    * 30-year yields hit 12-day low of 2.944 pct
    * 2-10-year yields hit 6-day lows
    * Trading volumes light ahead of OPEC meeting, Italy

 (Updates prices, adds comments)
    By Sam Forgione
    NEW YORK, Nov 29 (Reuters) - U.S. Treasury yields edged
lower on Tuesday, with long-dated yields touching their lowest
levels in nearly two weeks, as institutional investors bought
U.S. government bonds to balance their portfolios after this
month's selloff. 
    U.S. 30-year Treasury yields hit 2.944 percent, their lowest
in 12 days. Benchmark 10-year yields hit 2.296 percent, their
lowest in six days, while yields on shorter-maturity notes also
touched their lowest in six days. 
    Analysts said pension funds and other institutional
investors were buying Treasuries to meet routine month-end
portfolio adjustments, and that buying was likely more robust
than usual to compensate for a selloff this month following U.S.
President-elect Donald Trump's surprise victory on Nov. 8. 
    The move lower in yields was a reversal of the morning's
activity, when yields inched higher after the Commerce
Department said U.S. gross domestic product grew at a 3.2
percent annual rate in the third quarter, up from the previously
reported 2.9 percent pace and beating expectations of economists
polled by Reuters. 
    "The boost behind the price action is most likely related to
month-end tomorrow," said Stanley Sun, interest rate strategist
at Nomura Securities International in New York. He was referring
to the jump in Treasury prices, which move inversely to yields. 
    Analysts said trading volume was light, in part due to
reluctance to make bets ahead of key events and data releases
including Italy's referendum on constitutional reform on Dec. 4,
OPEC's meeting on Wednesday and U.S. monthly employment data due
on Friday. 
    The November selloff was fueled by bets Trump would adopt
policies that increase spending and debt as well as spur growth
and inflation, which would erode Treasuries prices. 
    U.S. government bonds were last on track to fall 2.5 percent
this month to post their worst monthly performance since
December 2009, according to Bloomberg Barclays index data. 
    "We've come a long way," said John Briggs, head of strategy
Americas at RBS Securities in Stamford, Connecticut, in
reference to the selloff. "Some money is being put to work."
    Benchmark 10-year notes were last up 6/32 in
price to yield 2.2981 percent, from 2.320 percent late on
    Two-year notes were last up 1/32 in price to
yield 1.0950 percent, compared with 1.111 percent late on
    Benchmark yields had hit a 16-month high of 2.417 percent on
Wednesday, while two-year yields reached a 6-1/2-year high of
1.17 percent on Friday.

    November 29 Tuesday 10:30AM New York / 1530 GMT
 US T BONDS DEC6               154-6/32     0-16/32   
 10YR TNotes DEC6              125-192/256  0-28/256  
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.4775       0.4847    -0.007
 Six-month bills               0.595        0.6051    -0.005
 Two-year note                 99-206/256   1.099     -0.012
 Three-year note               98-250/256   1.354     -0.016
 Five-year note                99-212/256   1.7861    -0.015
 Seven-year note               100-16/256   2.1153    -0.017
 10-year note                  97-84/256    2.3017    -0.018
 30-year bond                  98-144/256   2.9475    -0.035
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap        19.25        -0.75    
 U.S. 3-year dollar swap        12.50         0.00    
 U.S. 5-year dollar swap        -3.00        -0.75    
 U.S. 10-year dollar swap      -17.25        -0.25    
 U.S. 30-year dollar swap      -55.25         0.75    

 (Reporting by Sam Forgione; Editing by Lisa Von Ahn and
Meredith Mazzilli)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below