July 9, 2018 / 2:10 PM / 5 months ago

TREASURIES-U.S. yields up ahead of $69 bln in new supply, ebbing trade fears

    * U.S. to sell $69 bln coupon-bearing supply 
    * U.S. yield curve stays at flattest level since 2007

    By James Thorne
    NEW YORK, July 9 (Reuters) - Treasuries yields rose on
Monday as investors moved into equities and freed up cash for
new Treasuries auctions this week, following a strong U.S. jobs
report on Friday and a muted response to the start of U.S.
tariffs on Chinese imports.
    “We had flight to quality because of the trade tariffs. But
I think at the end this doesn’t mean a trade war is really
taking place,” said Tom di Galoma, managing director at Seaport
Global Securities LLC in New York. 
    The yield curve remained near its flattest spread since 2007
on low inflation expectations and rate hikes from the Federal
Reserve.
    Last week's jobs report showed lower-than-expected wage
gains, suggesting that inflation is not accelerating ahead of
this Thursday's core CPI inflation report.
    Investors also made room for $69 billion worth of auctions
in 3-year and 10-year Treasury notes
 and 30-year bonds starting
Tuesday.           
    Monday's risk-on trade sent global stocks to a two-week
high, marked by a 1.3 percent rise in MSCI's broadest index of
Asia-Pacific shares outside Japan.
    The Nasdaq, S&P 500 and Dow Jones Industrial average all
opened the week higher than Friday's close.
    The benchmark U.S 10-year note yielded 2.860
percent at 9:42 a.m. EDT (1342 GMT), up 2.7 basis points from
Friday. 
    The yield curve between two-year and 10-year notes
 was slightly higher from the previous week's
close at 28.90 basis points.

      July 9 Monday 9:42AM New York / 1342 GMT
                               Price                  
 US T BONDS SEP8               145-4/32     -17/32    
 10YR TNotes SEP8              120-32/256   -7/32     
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.9275       1.9633    0.012
 Six-month bills               2.075        2.1255    0.010
 Two-year note                 99-222/256   2.5693    0.024
 Three-year note               99-228/256   2.6637    0.028
 Five-year note                99-104/256   2.7535    0.030
 Seven-year note               99-132/256   2.827     0.030
 10-year note                  100-32/256   2.8601    0.029
 30-year bond                  103-28/256   2.9671    0.025
         YIELD CURVE           Last (bps)   Net       
                                            Change    
                                            (bps)     
 10-year vs 2-year yield       28.90        0.80      
 30-year vs 5-year yield       21.30        0.30      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        24.50        -1.00    
 spread                                               
 U.S. 3-year dollar swap        21.25        -1.00    
 spread                                               
 U.S. 5-year dollar swap        14.25        -1.00    
 spread                                               
 U.S. 10-year dollar swap        7.00        -0.75    
 spread                                               
 U.S. 30-year dollar swap       -4.75        -0.25    
 spread                                               
 





    
 (Reporting by James Thorne
Editing by Susan Thomas)
  
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