Bonds News

TREASURIES-Yields jump as stocks near highs ahead of record 10-year supply

 (Adds three-year auction results, data; updates prices)
    By Karen Brettell
    NEW YORK, Aug 11 (Reuters) - U.S. Treasury yields jumped to
one-month highs on Tuesday as stocks neared records, reducing
demand for safe-haven debt, and before the Treasury will sell
its largest-ever amount of 10-year notes on Wednesday. 
    Stocks gained after Russian President Vladimir Putin said on
Tuesday that Russia had become the first country in the world to
grant regulatory approval to a COVID-19 vaccine after less than
two months of human testing.
    “The Russian news certainly spurred another 'risk on'
session overnight,” said Tom di Galoma, managing director at
Seaport Global Holdings in New York.
    Expectations of further stimulus by the U.S. government 
further boosted risk appetite.
    “All these things are allowing this 'risk on' sentiment to
continue,” di Galoma said.
    U.S. President Donald Trump on Monday said he was
considering cutting the federal capital gains tax and lowering
income taxes for middle-income families to help the economy
recover from the economic fallout of the coronavirus pandemic.

    Trump on Saturday signed executive orders and a memorandum
seeking to provide relief to workers, businesses and local
governments, but he faces opposition to the moves.
    Benchmark 10-year note yields jumped eight basis
points to 0.655%, after earlier reaching 0.661%, the highest
since July 13. They are up from a low of 0.504% on Thursday.
    The yield curve between two-year and 10-year notes
 steepened five basis points to 49 basis points.
    Yields also jumped before the Treasury will sell a record
$38 billion in 10-year notes on Wednesday.
    The Treasury last week increased auction sizes across the
curve and said that it plans to continue to shift more of its
funding to longer-dated debt in coming quarters as it finances
measures to offset the impact of the epidemic.
    A record $48 billion sale of three-year notes on Tuesday
drew solid demand.
    The Treasury will also sell $26 billion in 30-year bonds on
    Data on Tuesday showed that U.S. producer prices increased
by the most in more than 1-1/2 years in July, but the overall
trend in producer inflation remained subdued amid signs the
economy's recovery from the recession was faltering.

August 11 Tuesday 3:01PM New York / 1901 GMT
 US T BONDS SEP0               179-6/32     -2-3/32   
 10YR TNotes SEP0              139-68/256   -0-156/2  
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.11         0.1116    0.003
 Six-month bills               0.1225       0.1243    0.002
 Two-year note                 99-239/256   0.1588    0.028
 Three-year note               99-212/256   0.184     0.040
 Five-year note                99-208/256   0.288     0.054
 Seven-year note               99-64/256    0.4846    0.070
 10-year note                  99-184/256   0.6548    0.081
 20-year bond                  100-40/256   1.1161    0.095
 30-year bond                  97-180/256   1.3439    0.097
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         7.75        -1.00    
 U.S. 3-year dollar swap         6.75        -1.25    
 U.S. 5-year dollar swap         5.50        -1.25    
 U.S. 10-year dollar swap        0.00        -1.50    
 U.S. 30-year dollar swap      -39.75        -1.75    
 spread (Editing by Jonathan Oatis and Dan Grebler)