March 10, 2020 / 1:51 PM / 3 months ago

TREASURIES-U.S. Treasury yields head higher with talk of economic stimulus

    By Karen Pierog
    CHICAGO, March 10 - U.S. Treasury yields on Tuesday rose
from all-time lows as global oil and stock markets rebounded
after huge losses on Monday fueled by an oil price war and
growing concerns over the economic impact of the coronavirus.
    The 10-year bond yield was last at 0.629%, well
above its new record low of 0.318%
    "You do have some further talk of fiscal stimulus in the
United States and Europe and Japan that's giving some
confidence," said Stan Shipley, fixed income strategist at
Evercore ISI in New York.
    Wall Street opened stronger on stimulus hopes, recovering
some of the losses it suffered from Monday's biggest one-day
percentage fall.
    Sentiment was bolstered overnight after President Donald
Trump promised "major" steps to combat the virus outbreak and
said he would discuss a payroll tax cut with congressional
    Oil also regained some losses from its biggest one-day
decline since the Gulf War in 1991, supported by expectations
for a settlement to the price war between Saudi Arabia and
Russia and potential U.S. output cuts.
    Thirty-year Treasury yields, which fell to a record low of
0.70% on Monday, last traded at 1.103%.
    After tumbling to a 5-1/2-year low of 0.251% on Monday,
two-year Treasury yields were trading at 0.416%.
    As for overnight repurchase agreement (repo) operations, the
New York Federal Reserve accepted all $123.63 billion in bids
from primary dealers after raising its limit to $150 billion
from $100 billion on Monday to ensure an ample supply of bank
    However, 14-day repos were oversubscribed with the NY Fed
accepting $45 billion out of $93 billion in bids. The
oversubscribed operation indicates demand for loans remains high
as investors worry about the economic impact of the coronavirus
outbreak and repercussions from plunging oil prices.


    March 10 Tuesday 8:09AM New York / 1309 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.42         0.4275    0.039
 Six-month bills               0.4225       0.4305    0.060
 Two-year note                 101-100/256  0.4155    0.068
 Three-year note               102-158/256  0.4748    0.100
 Five-year note                102-230/256  0.5333    0.107
 Seven-year note               103-72/256   0.6428    0.132
 10-year note                  108-96/256   0.6288    0.131
 30-year bond                  122-208/256  1.103     0.165
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         8.00        -4.25    
 U.S. 3-year dollar swap         4.75        -6.50    
 U.S. 5-year dollar swap         6.00        -4.25    
 U.S. 10-year dollar swap        5.00        -4.25    
 U.S. 30-year dollar swap      -40.00        -8.50    
 (By Karen Pierog in Chicago and Karen Brettell in New York;
Editing by David Gregorio)
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