January 17, 2019 / 3:55 PM / 7 months ago

TREASURIES-U.S. yields edge up as economic data offsets trade jitters

    * Philly Fed, jobless claims data pare economic worries
    * Trade tensions, weak results spur early bids for bonds
    * U.S. to sell $13 bln 10-year TIPS at 1 p.m. (1800 GMT)

 (Updates market action, adds quote)
    By Richard Leong
    NEW YORK, Jan 17 (Reuters) - U.S. Treasury yields ticked up
on Thursday as better-than-expected economic data offset trade
tensions between China and the United States, holding down
safe-haven bids for U.S. government debt.
    This week's offering of corporate bonds put some upward
pressure on Treasury yields, as dealers sold Treasuries to lock
in borrowing costs on debt they underwrote and investors reduced
their U.S. government debt holdings to make room for the
corporate supply, traders and analysts said.
    On the other hand, the historically long government shutdown
and uncertainty about Brexit have kept a lid on Treasury yields,
holding them in a tight trading range this week.
    "A lot of the risk events this week haven't done a lot to
the various parts of the yield curve," said Mike Lorizio, head
of Treasury and agency trading at Manulife Asset Management in
Boston.
    At 10:37 a.m. (1537 GMT), the yield on benchmark 10-year
Treasury notes was 2.734 percent, up 0.5 basis point
from late on Wednesday.
    Bond yields were lower earlier along with weaker U.S. stock
index futures after U.S. lawmakers introduced bills on Wednesday
that would ban the sale of U.S. computer chips or other
components to Chinese firms that violate U.S. sanctions or
export control laws.
    This legislative move reduced optimism about Washington and
Beijing to resolve their trade issues.
    The initial safe-haven demand for Treasuries faded following
an unexpected fall in domestic first-time filings for
unemployment benefits last week and a stronger-than-forecast
increase in early January on a measure of Mid-Atlantic business
activity from the Philadelphia Federal Reserve.
    The 10-year Treasury yield hit a near one-year low of 2.543
percent almost two weeks ago on concerns about weakening
economic growth and bets the U.S. central bank may not raise
interest rates in 2019.
    On the supply front, companies have raised $21.4 billion
through investment-grade debt sales this week, according to IFR.

    The Treasury Department will sell $13 billion in 10-year
Treasury Inflation Protected Securities at 1
p.m. (1800 GMT). 
January 17 Thursday 10:38 AM New York / 1538 GMT
                               Price                  
 US T BONDS MAR9               145-7/32     1/32      
 10YR TNotes MAR9              121-164/256  -3/32     
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             2.365        2.4121    -0.008
 Six-month bills               2.4375       2.502     0.002
 Two-year note                 99-227/256   2.5596    0.013
 Three-year note               99-224/256   2.5436    0.014
 Five-year note                100-80/256   2.5572    0.012
 Seven-year note               99-244/256   2.6323    0.010
 10-year note                  103-88/256   2.7343    0.005
 30-year bond                  105-240/256  3.0695    -0.006
         YIELD CURVE           Last (bps)   Net       
                                            Change    
                                            (bps)     
 10-year vs 2-year yield       17.20        -0.80     
 30-year vs 5-year yield       51.20        -2.10     
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        16.50         0.00    
 spread                                               
 U.S. 3-year dollar swap        12.50         0.00    
 spread                                               
 U.S. 5-year dollar swap         9.50         0.50    
 spread                                               
 U.S. 10-year dollar swap        3.50         0.50    
 spread                                               
 U.S. 30-year dollar swap      -20.00         0.25    
 spread                                               
 
    

    
 (Reporting by Richard Leong)
  
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