January 25, 2019 / 3:38 PM / 6 months ago

TREASURIES-U.S. bond yields rise as Wall Street gains

    * U.S. stock prices rise on upbeat company earnings
    * U.S. to sell $113 bln in fixed-rate debt next week
    * Traders await Fed policy meeting, U.S. jobs data  

 (Updates market action, adds quote)
    By Richard Leong
    NEW YORK, Jan 25 (Reuters) - U.S. Treasury yields rose on
Friday, with 10-year yields bouncing from a one-week low, as
Wall Street stocks climbed on upbeat company results, offsetting
worries about slowing economic growth and the U.S.-China trade
conflict.
    Looming Treasury supply next week together with caution
ahead of the Federal Reserve's policy meeting and the
government's payrolls report added upward pressure on bond
yields.
    "The market is getting its cue from the equity market," said
Subadra Rajappa, head of U.S. rates strategy at SG Corporate &
Investment Banking in New York.
    At 10:24 a.m. (1524 GMT) the yield on benchmark 10-year
Treasury notes was 3.8 basis points higher at 2.750
percent. It hit a one-week low of 2.700 percent on Thursday.
    Two-year Treasury yields, which are particularly
sensitive to traders' views on Fed policy, were up 2.6 basis
points at 2.588 percent.
    The S&P 500 was up 0.9 percent, while the Dow
was 1.1 percent higher and the Nasdaq rose 1 percent.
    Interest rates futures implied traders expected about a 25
percent chance the Fed would raise key lending rates by the end
of 2019, up from 22 percent late on Thursday, according to CME
Group's FedWatch program.
    The Fed will hold its first policy meeting of 2019 next
week, on Tuesday and Wednesday.
    On the supply front, the Treasury Department will sell a
combined $113 billion in two-year, five-year and seven-year
fixed-rate securities, the same amount it auctioned in December.

    It also will sell $20 billion in two-year floating-rate
notes next week, up from $18 billion auctioned last month.

January 25 Friday 10:26AM New York / 1526 GMT
                               Price                  
 US T BONDS MAR9               145-3/32     -22/32    
 10YR TNotes MAR9              121-112/256  -10/32    
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             2.34         2.386     0.017
 Six-month bills               2.44         2.5041    -0.003
 Two-year note                 99-214/256   2.5875    0.026
 Three-year note               99-208/256   2.5659    0.033
 Five-year note                100-50/256   2.5823    0.037
 Seven-year note               99-208/256   2.6546    0.040
 10-year note                  103-52/256   2.7495    0.038
 30-year bond                  106-12/256   3.0639    0.031
         YIELD CURVE           Last (bps)   Net       
                                            Change    
                                            (bps)     
 10-year vs 2-year yield       16.10        1.00      
 30-year vs 5-year yield       48.10        -0.15     
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        14.75        -0.25    
 spread                                               
 U.S. 3-year dollar swap        11.75         0.00    
 spread                                               
 U.S. 5-year dollar swap         8.25         0.00    
 spread                                               
 U.S. 10-year dollar swap        3.25         0.25    
 spread                                               
 U.S. 30-year dollar swap      -17.75        -0.25    
 spread                                               
 
    

 (Reporting by Richard Leong; Editing by Meredith Mazzilli)
  
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