February 19, 2020 / 7:41 PM / 2 months ago

TREASURIES-Yields rise with stocks on China stimulus hopes

 (Adds Fed meeting minutes, updates prices)
    * Producer prices rise, housing data better than expected
    * Fed policymakers expect to hold rates steady this year

    By Karen Brettell
    NEW YORK, Feb 19 (Reuters) - U.S. Treasury yields edged
higher on Wednesday as a report that China will take more steps
to bolster its virus-hit economy boosted risk taking, and U.S.
economic data beat economists’ expectations.
    Bloomberg News reported that Beijing was considering cash
injections or mergers to bail out airlines hit by the virus,
sending stocks higher.
    The death toll from the coronavirus climbed above 2,000 in
China, but the tally of newly reported cases fell for a second
day to the lowest since January.
    “Equities are performing well, after being under a bit of
pressure,” said Ian Lyngen, head of U.S. rates strategy at BMO
Capital Markets in New York.
    The spread of the virus is central to risk appetite as
investors weigh how it will affect the global economy.
    “It really does come down to the impact of the coronavirus
on global growth starting in Asia, going into the supply chain,
and presumably at some point trickling through to the domestic
economic outlook,” Lyngen said.
    Benchmark 10-year note yields rose one basis
point to 1.57%.
    Economic data on Wednesday showed that U.S. producer prices
increased in January by the most in more than a year, boosted by
rises in the costs of services such as healthcare and hotel
accommodation.
    U.S. homebuilding fell less than expected in January, while
permits surged to a near 13-year high, pointing to sustained
housing market strength amid lower mortgage rates.
    Minutes from the Federal Reserve's January meeting released
on Wednesday showed that policymakers were cautiously optimistic
about their ability to hold interest rates steady this year,
even as they acknowledged new risks caused by the coronavirus
outbreak.
    
       February 19 Wednesday 2:30PM New York / 1930 GMT
    
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.5575       1.5897    0.008
 Six-month bills               1.5175       1.5547    -0.027
 Two-year note                 99-234/256   1.4198    0.010
 Three-year note               99-246/256   1.3884    0.013
 Five-year note                99-220/256   1.4045    0.012
 Seven-year note               100-12/256   1.4928    0.011
 10-year note                  99-108/256   1.5627    0.007
 30-year bond                  99-208/256   2.0083    0.002
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         2.75         0.50    
 spread                                               
 U.S. 3-year dollar swap         1.25         0.00    
 spread                                               
 U.S. 5-year dollar swap        -1.00         0.25    
 spread                                               
 U.S. 10-year dollar swap       -6.00         0.50    
 spread                                               
 U.S. 30-year dollar swap      -33.75         0.25    
 spread                                               
 
    
    

 (Reporting by Karen Brettell; editing by Jonathan Oatis and
Leslie Adler)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below