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Bonds News

TREASURIES-U.S. yields slip before debt supply on Trump trade stance

* Trump's trade stance stokes safe-haven bids for bonds
    * U.S. to auction $88 bln in coupon-bearing debt
    * Companies to sell $20-$25 bln in high-grade debt -IFR

    By Richard Leong
    NEW YORK, Jan 23 (Reuters) - U.S. Treasury yields slipped on
Monday as investor jitters over President Donald Trump's tough
stance on trade spurred safe-haven demand for bonds ahead of $88
billion in government debt supply this week.
    Moves to restrict trade, and scant details on proposed tax
cuts, infrastructure spending and deregulation, have prompted
some investors reassess the level of possible future government
stimulus to bolster the U.S. economy.
    On Monday, Trump told U.S. manufacturing executives he would
impose a hefty border tax on firms that import products to the
United States after moving American factories overseas. 
    He also plans to sign an executive order to renegotiate the
free trade agreement between the U.S., Canada and Mexico, NBC
News reported.  
    "The market might want to see tax cuts and infrastructure
spending first, but this shouldn't be a surprise. Renegotiation
of trade agreements is what he campaigned on," said Mike
Lorizio, senior fixed-income trader at Manulife Asset Management
in Boston.
    The yield on benchmark 10-year Treasury notes 
was down 2 basis points at 2.450 percent, while 30-year yield
 dipped 1 basis point to 3.032 percent.
    There have been signs some investors have scaled back on
bearish bond bets due to the prospects for faster growth and
inflation under a Trump administration and a
Republican-controlled Congress.
    Speculators reduced net shorts in U.S. five-year and 10-year
T-note futures from record high levels last week, according to
Commodity Futures Trading Commission data on Friday.
 
    The safety bid for Treasuries was mitigated by upcoming
sales of coupon-bearing government debt supply.
    The U.S. Treasury Department will sell $26 billion in
two-year notes on Tuesday; $34 billion in
five-year debt on Wednesday and $28 billion in
seven-year notes on Thursday. 
    Treasuries issuance will compete with another wave of
investment-grade corporate bond supply, estimated at $20 billion
to $25 billion this week, according to IFR, a Thomson Reuters
unit. 
January 23 Monday 10:06AM New York / 1506 GMT
                               Price                  
 US T BONDS MAR7               151-12/32    0-19/32   
 10YR TNotes MAR7              124-128/256  0-72/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.495        0.5025    0.005
 Six-month bills               0.605        0.6152    -0.003
 Two-year note                 100-42/256   1.1638    -0.033
 Three-year note               99-198/256   1.4531    -0.035
 Five-year note                100-122/256  1.8982    -0.040
 Seven-year note               100-28/256   2.2328    -0.035
 10-year note                  96-52/256    2.4375    -0.030
 30-year bond                  97-36/256    3.0211    -0.025
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        31.75         0.00    
 spread                                               
 U.S. 3-year dollar swap        23.25         0.50    
 spread                                               
 U.S. 5-year dollar swap         6.50         0.25    
 spread                                               
 U.S. 10-year dollar swap      -10.75        -0.25    
 spread                                               
 U.S. 30-year dollar swap      -44.75         0.25    
 spread                                               
 
    
    

 (Editing by Bernadette Baum)
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