Bonds News

TREASURIES-U.S. Treasury yields steady; investors cautious despite strong housing data

 (New throughout, updates prices, market activity and comments)
    By Ross Kerber
    BOSTON, Dec 17 (Reuters) - U.S. Treasury yields were steady
on Tuesday as investors stayed cautious despite strong U.S.
housing data.
    The benchmark 10-year yield was up less than a
basis point to 1.8923% in trading on Tuesday afternoon, after
falling as low as 1.8520% during in the session.
    Steve Johnson, senior portfolio manager at SVB Asset
Management, said investors were awaiting certainty about major
issues such as U.S.-China trade negotiations and the final shape
of Britain's exit from the European Union.
    "What the market really wants to see is more of that macro
clarity," Johnson said.    
    Investors also could have been hesitant to take on more risk
a day after the 10-year yield rose 6.8 basis points and stock
indexes reached new highs. 
    "It's the bond market taking a breather after a meaningful
selloff in the last few days," said Subadra Rajappa, head of U.S
rates strategy at Societe Generale. 
    She noted the caution came even though a Commerce Department
report showed U.S. homebuilding increased more than expected in
November and permits for future home construction surged to a
12-1/2-year high as lower mortgage rates continued to boost the
housing market and support the broader economy.
    The report also showed the stock of homes under construction
last month was the highest since 2007, which could help to
loosen a supply squeeze that has stalked the housing market.
    In addition the U.S. House of Representatives on Tuesday
approved a $1.4 trillion spending package to avert a partial
government shutdown.
    Offsetting the positive economic news was a report by Boeing
Co that it would pause production in January of its
best-selling 737 MAX jet, which faces a safety
    The two-year yield, which typically moves in step
with interest rate expectations, was down 1.2 basis points to
1.6326% on Tuesday afternoon.
  December 17 Tuesday 2:33PM New York / 1933 GMT Price        Current   Net
                                            Yield %   Change
 Three-month bills             1.54         1.5719    0.006
 Six-month bills               1.5525       1.5909    0.013
 Two-year note                 99-191/256   1.6326    -0.012
 Three-year note               99-230/256   1.6599    -0.008
 Five-year note                98-254/256   1.7131    -0.007
 Seven-year note               98-180/256   1.8245    -0.005
 10-year note                  98-184/256   1.8923    0.003
 30-year bond                  101-44/256   2.3204    0.012
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         5.50         1.25    
 U.S. 3-year dollar swap         1.50         1.00    
 U.S. 5-year dollar swap        -1.00         0.75    
 U.S. 10-year dollar swap       -5.25         0.50    
 U.S. 30-year dollar swap      -30.00        -0.25    
 (Editing by David Gregorio)