June 23, 2020 / 2:08 PM / 18 days ago

TREASURIES-Longer-term yields higher after trade deal reassurance

    By Ross Kerber and Chuck Mikolajczak
    June 23 (Reuters) - Longer-term U.S. Treasury yields rose on
Tuesday on positive economic reports and a reassurance on
U.S.-China trade relations.
    The benchmark 10-year yield was 1.3 basis points
higher in morning trading at 0.7168%.
    The activity mirrored equities trading, with Wall Street's
main indexes opening higher. White House trade adviser Peter
Navarro on Monday walked back on his earlier remarks that the
U.S.-China trade pact was "over", which had stoked market
volatility nL1N2E0050] 
    Investors also took heart from upbeat business activity data
from Europe.
    Jim Barnes, director of fixed income at Bryn Mawr Trust,
said Tuesday's trading marked a break from past sessions where
Treasury investors seemed more concerned with the pace of the
COVID-19 pandemic and its economic implications.
    "The market is starting to trade a little bit on some of
those factors that were influencing the markets before COVID-19,
some of the geopolitical issues (and) trade issues," he said
    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 at 53 basis points, about 2 basis points
higher than Monday's close.        
    The two-year  U.S. Treasury yield, which
typically moves in step with interest rate expectations, was
down less than a basis point at 0.1877% in morning trading.
    Investors also awaited a planned Treasury Department auction
of two-year notes, with results due in the early afternoon.    
  June 23 Tuesday 9:49AM New York / 1349 GMT
                               Price                  
 US T BONDS SEP0               176-29/32    -0-12/32  
 10YR TNotes SEP0              138-172/256  -0-8/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.1525       0.1547    -0.005
 Six-month bills               0.1775       0.1801    0.002
 Two-year note                 99-225/256   0.1877    -0.004
 Three-year note               100-28/256   0.2131    -0.011
 Five-year note                99-158/256   0.3283    -0.007
 Seven-year note               99-188/256   0.5391    0.002
 10-year note                  99-32/256    0.7168    0.013
 20-year bond                  97-216/256   1.2477    0.020
 30-year bond                  94-84/256    1.4857    0.024
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.25         0.25    
 spread                                               
 U.S. 3-year dollar swap         4.75         0.75    
 spread                                               
 U.S. 5-year dollar swap         4.00         0.50    
 spread                                               
 U.S. 10-year dollar swap       -1.50         0.25    
 spread                                               
 U.S. 30-year dollar swap      -48.75         0.75    
 spread                                               
                                                      
 

 (Reporting by Ross Kerber in Boston and by Chuck Mikolajczak in
New York
Editing by Nick Zieminski)
  
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