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TREASURIES-Longer-term yields climb as investors embrace risk

 (Updates yields, adds auction results and analyst comments)
    By Karen Pierog
    CHICAGO, Nov 24 (Reuters) - U.S. Treasury yields on the
longer end of the curve rose on Tuesday as investors rushed to
riskier investments, including soaring stocks.
    The benchmark 10-year yield, which hit a session
high of 0.888%, was last up 2.7 basis points at 0.8865% and the
yield curve steepened. The yield on 30-year bonds was last up
4.6 basis points at 1.6092%.
    Stan Shipley, fixed-income strategist at Evercore ISI in New
York, said investors, driven by hopes of a closer economic
recovery, were ditching the safe haven of Treasuries for riskier
commodities and stocks.
   "With yields of 85 or 88 basis points, that's not very
attractive on the 10-year (note), and (people are) going to look
for returns elsewhere," he said.
    Economic rebound hopes spurred by progress on coronavirus
vaccines, along with the commencement of President-elect Joe
Biden's transition process three weeks after the election,
pushed stocks higher and lifted the Dow Jones Industrial Average
over the 30,000 mark for the first time.

    Market positioning ahead of Thursday's Thanksgiving holiday
was also a factor, according to Tom Simons, money market
economist at Jefferies in New York.
    "Nobody wants to be still holding onto big short positions,"
he said. 
    On the auction front, the U.S. Treasury sold $56 billion of
seven-year notes at a high yield of 0.653% and with a
bid-to-cover ratio of 2.37. The offering followed
auctions of two- and five-year notes on Monday.
    Simons said the seven-year note auction went "pretty well." 
    "This one was slightly better than average and yesterday's
(five-year note auction) was slightly worse than average," he
said.
     The two-year U.S. Treasury yield, which
typically moves in step with interest rate expectations, was
last down less than a basis point at 0.1641%.
   A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was last at 71.90 basis points, 2.8 basis points
higher than Monday's close. 
 November 24 Tuesday 3:09PM New York / 2109 GMT
                               Price Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.085        0.0864    -0.003
 Six-month bills               0.09         0.0913    0.000
 Two-year note                 99-236/256   0.1641    -0.005
 Three-year note               100-26/256   0.2157    -0.005
 Five-year note                99-224/256   0.4003    0.005
 Seven-year note               98-250/256   0.6512    0.017
 10-year note                  99-228/256   0.8865    0.027
 20-year bond                  99-136/256   1.402     0.040
 30-year bond                  100-96/256   1.6092    0.046
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         9.50         1.00    
 spread                                               
 U.S. 3-year dollar swap         8.75         1.25    
 spread                                               
 U.S. 5-year dollar swap         6.50         0.00    
 spread                                               
 U.S. 10-year dollar swap        0.00         0.50    
 spread                                               
 U.S. 30-year dollar swap      -31.75         0.00    
 spread (Reporting by Karen Pierog; editing by Jonathan Oatis and Lisa
Shumaker)
  
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