January 13, 2020 / 2:40 PM / 6 days ago

TREASURIES-U.S. yields rise as traders look to trade agreement

    By Ross Kerber
    BOSTON, Jan 13 (Reuters) - U.S. Treasury yields were higher
on Monday as traders shifted attention away from Middle East
tensions and toward the expected signing of a trade deal between
the United States and China. 
    The benchmark 10-year yield was up 1.7 basis
points in morning trading to 1.8441%, reflecting increased
appetite for risk as U.S. corporations start to report
fourth-quarter earnings this week.
    Euro zone government bond yields were also up on Monday 
ahead of the signing of a U.S.-China Phase 1 trade deal expected
on Wednesday, a major step in ending a dispute that threatened
to hammer global growth and boosted demand for safer assets such
as bonds.
    "The market has found at least a short-term comfort area,"
said Justin Lederer, a Cantor Fitzgerald Treasury analyst. 
    Yields on 10-year bonds fell last week as the United States
and Iran appeared headed toward continuing military conflict and
drove investors toward safer assets, then recovered as the risk
appeared to diminish. 
    Protests in Iran against the country's clerical rulers since
the weekend underscore that many political uncertainties remain.
 
    But that drama is focused within Iran and at least from a
global financial standpoint, the tensions are "definitely
subsiding, at least for now," Lederer said.
    Wall Street reached record highs last week despite an
underwhelming December jobs report. Investors this week will
focus on fourth-quarter earnings from major U.S. banks JPMorgan
Chase & Co, Morgan Stanley, Goldman Sachs Group
Inc and Wells Fargo & Co starting
Tuesday.
    Analysts expect profits at S&P 500 companies to drop 0.6% in
a second straight quarterly decline, according to Refinitiv IBES
data, partly due to a strong quarter a year ago and also because
of a drag from energy and industrials, which have borne the
brunt of the trade war.
    The two-year yield, which typically moves in step with
interest rate expectations, was up less than a basis point to
1.5761% in Monday morning trading.
    
January 13 Monday 9:28AM New York / 1428 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.515        1.5458    0.008
 Six-month bills               1.5175       1.5544    0.007
 Two-year note                 100-24/256   1.5761    0.004
 Three-year note               99-186/256   1.5937    0.008
 Five-year note                100-124/256  1.6479    0.012
 Seven-year note               99-236/256   1.7619    0.017
 10-year note                  99-40/256    1.8441    0.017
 30-year bond                  101-124/256  2.3058    0.021
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.00         0.00    
 spread                                               
 U.S. 3-year dollar swap         2.25         0.00    
 spread                                               
 U.S. 5-year dollar swap        -0.75         0.00    
 spread                                               
 U.S. 10-year dollar swap       -5.75         0.00    
 spread                                               
 U.S. 30-year dollar swap      -33.00        -0.25    
 spread                                               
 
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