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TREASURIES-Yields inch lower in line with European bonds after ECB
October 26, 2017 / 2:25 PM / in 25 days

TREASURIES-Yields inch lower in line with European bonds after ECB

    By Gertrude Chavez-Dreyfuss
    NEW YORK, Oct 26 (Reuters) - U.S. Treasury yields slipped on
Thursday after two days of gains in choppy trading, tracking the
euro zone bond market, after the European Central Bank extended
its stimulus program until at least September next year but at a
diminished pace. 
    The ECB said it will cut its bond purchases in half to 30
billion euros a month from January, but hedged its bets by
stretching asset buys by nine months given persistently low
inflation.
    "U.S. yields are following global yields lower, fairly
sharply as well," said Gennadiy Goldberg, interest rates
strategist at TD Securities in New York.
    "The risk of the ECB being a little more hawkish has led to
the rise in yields for the last week or so. So this is a little
bit of a spillover effect."
    A report from Politico saying that current Federal Reserve
Chair Janet Yellen is out of the running for the top U.S.
central bank job briefly nudged rates higher. But a White House
official told Reuters: "No final decision has been made."

    The other two contenders for the Fed job are Stanford
University economist John Taylor, and current Fed Governor
Jerome Powell. Both are viewed as more hawkish than Yellen.
    In mid-morning trading, 10-year U.S. Treasury note yields
were at 2.440 percent, slightly down from 
Wednesday's 2.444 percent. Ten-year yields hit a seven-month
peak on Wednesday.
    U.S. 30-year bond yields were lower for most of the session,
but were last little changed at 2.956 percent, from 2.955
percent the previous session. Thirty-year yields had risen to a
five-month high on Wednesday.
    
  October 26 Thursday 10:11AM New York / 1411 GMT
                               Price                  
 US T BONDS DEC7               150-27/32    -0-2/32   
 10YR TNotes DEC7              124-128/256  0-12/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.085        1.1031    -0.008
 Six-month bills               1.245        1.2702    -0.003
 Two-year note                 99-204/256   1.603     -0.004
 Three-year note               99-176/256   1.7334    -0.003
 Five-year note                99-192/256   2.0529    -0.012
 Seven-year note               99-8/256     2.2769    -0.005
 10-year note                  98-92/256    2.439     -0.005
 30-year bond                  95-240/256   2.9559    0.001
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        22.50        -0.25    
 spread                                               
 U.S. 3-year dollar swap        22.50         0.00    
 spread                                               
 U.S. 5-year dollar swap         7.50         0.00    
 spread                                               
 U.S. 10-year dollar swap       -2.75        -0.25    
 spread                                               
 U.S. 30-year dollar swap      -29.50        -0.25    
 spread                                               
 
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea
Ricci)
  

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