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United States

Karen Pierog

U.S. long bond demand raises prospect of whole curve yielding below 1%

Aug 03 2020

BOSTON/CHICAGO, August 3 A decline in U.S. Treasury yields over recent weeks has investors eyeing the approach of an unusual phenomenon - the entire U.S. yield curve sinking below 1%.

Fed buying spree could move to long end of yield curve: analysts

Jul 29 2020

CHICAGO The Federal Reserve may shift more of its buying to the long end of the yield curve, analysts say, as the Treasury market braces for a surge in supply to finance relief efforts in the wake of the coronavirus pandemic.

Fed buying spree could move to long end of yield curve: analysts

Jul 29 2020

CHICAGO The Federal Reserve may shift more of its buying to the long end of the yield curve, analysts say, as the Treasury market braces for a surge in supply to finance relief efforts in the wake of the coronavirus pandemic.

Fed buying spree could move to long end of yield curve -analysts

Jul 29 2020

CHICAGO, July 29 The Federal Reserve may shift more of its buying to the long end of the yield curve, analysts say, as the Treasury market braces for a surge in supply to finance relief efforts in the wake of the coronavirus pandemic.

Fed meeting expected to leave U.S. bond-stock relationship out of whack

Jul 27 2020

NEW YORK The Federal Reserve's whatever-it-takes approach to stave off economic calamity has kept interest rates near zero and helped drive U.S. stocks back to pre-pandemic record levels, while weakening the usual dynamic between safe-haven U.S. Treasuries and riskier equities.

TREASURIES-Yields mixed as fiscal stimulus and Fed meeting loom

Jul 24 2020

(Recasts, updates yields, adds analyst comments) By Karen Pierog CHICAGO, July 24 U.S. Treasury yields were mixed on Friday as stocks fell and the market looked ahead to developments next week on new fiscal stimulus steps, as well as a Federal Reserve meeting. The benchmark 10-year yield was last up less than a basis point at 0.5888%. Priya Misra, head of global rates strategy for TD Securities in New York, said the 10-year yield, which is near the low end of the range where it has been trading since March, may break lower as more supply may be coming to fund another potential round of fiscal aid from Washington to fight the economic fallout from the coronavirus pandemic. "I think we're breaking out. We're going lower in yields because of what's happening with risk assets, data momentum seems to be slowing. So my view is it's going to decline," she said. U.S. Senate Republicans will unveil their proposal next week for a fresh round of coronavirus aid, including more direct payments to Americans and a partial extension of enhanced unemployment benefits, Senate Majority Leader Mitch McConnell said on Thursday. Fed policy makers will meet Tuesday and Wednesday. "I think they're going to clear up their economic forecast, not that that matters a great deal," said Stan Shipley, research analyst for Evercore ISI, adding that more clarity on the Fed's forward views might come at the central bank's September meeting. Wall Street was lower as U.S.-China tensions and fears over mounting coronavirus cases fed selling ahead of the weekend. After auctions this week of $17 billion of 20-year bonds and $14 billion of 10-year Treasury-Inflation Protected Securities (TIPS), the U.S. Treasury will offer $141 billion of two-, five- and seven-year notes next week. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was unchanged at 0.1494%. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, which is viewed as an indicator of economic expectations, was last at 43.80 basis points, about 1.60 basis point higher than at Thursday's close. July 24 Friday 1:55PM New York / 1855 GMT Price Price Current Net Yield % Change (bps) Three-month bills 0.1075 0.109 -0.008 Six-month bills 0.1325 0.1344 0.000 Two-year note 99-244/256 0.1494 0.000 Three-year note 99-222/256 0.1699 -0.002 Five-year note 99-226/256 0.274 0.008 Seven-year note 100-96/256 0.445 0.007 10-year note 100-88/256 0.5888 0.007 20-year bond 101-204/256 1.0245 -0.005 30-year bond 100-68/256 1.2393 -0.011 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.00 0.25 spread U.S. 3-year dollar swap 4.75 0.50 spread U.S. 5-year dollar swap 3.00 -0.25 spread U.S. 10-year dollar swap -1.00 0.25 spread U.S. 30-year dollar swap -42.00 1.75 spread (Reporting by Karen Pierog; editing by Jonathan Oatis and David Gregorio)

TREASURIES-Yields fall, record-low auction yield for 10-year TIPS

Jul 23 2020

(Adds closing yields) By Karen Pierog CHICAGO, July 23 U.S. Treasury yields on the longer end of the yield curve drifted lower on Thursday as stocks fell and the auction yield for 10-year Treasury-Inflation Protected Securities (TIPS) hit an all-time low. The benchmark 10-year yield ended the U.S. trading session at 0.5774%, the lowest close since April 21. The $14 billion of 10-year TIPS were sold at -0.930%, the lowest yield ever in an auction of that security. TIPS yields are equal to relevant Treasury yields minus expected annual inflation, making them a market indicator of real interest rates. The bid-to-cover ratio, a metric of overall demand, was 2.24. The auction went "pretty well," according to Tom Simons, a money market economist at Jefferies in New York. "The direct bid was a little soft, which is not all that unusual in recent times," he said, noting there was a strong take-down on the indirect bid side. A rush into TIPS has pushed yields to near historic lows amid an uptick in inflation expectations. The 10-year TIPS yield was last at -0.881%. "With the amount of stimulus that's out there, it's hard to believe that there's not some inflation that's going to come out of this," said John Mousseau, president and CEO of Cumberland Advisors. The latest weekly jobless claims data, which showed initial claims rising for the first time since late March, did little to jar the market, which was closely following ongoing talks in Washington over the next round of aid to combat the economic fallout from the coronavirus pandemic. "We're waiting for more direction on what's going on with potential stimulus. We get bits and pieces of headlines here and there that's not helpful for the market finding direction," Simons said. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, viewed as an indicator of economic expectations, closed at 42.57 basis points, the flattest since April 28. July 23 Thursday 3:55PM New York / 2055 GMT Price Current Net Yield % Change (bps) Three-month bills 0.1175 0.1192 -0.003 Six-month bills 0.135 0.137 0.005 Two-year note 99-242/256 0.1533 0.006 Three-year note 99-218/256 0.175 0.005 Five-year note 99-232/256 0.2691 0.000 Seven-year note 100-108/256 0.4382 -0.009 10-year note 100-112/256 0.579 -0.016 20-year bond 101-252/256 1.0142 -0.050 30-year bond 100-120/256 1.2311 -0.059 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 5.50 -0.75 spread U.S. 3-year dollar swap 4.00 -0.75 spread U.S. 5-year dollar swap 3.25 0.00 spread U.S. 10-year dollar swap -1.25 0.75 spread U.S. 30-year dollar swap -43.25 3.25 spread (By Karen Pierog; Editing by Cynthia Osterman and Dan Grebler)

TREASURIES-Yields fall, record-low auction yield hit for 10-year TIPS

Jul 23 2020

(Recasts, updates yields, adds auction results, analyst comments) By Karen Pierog CHICAGO, July 23 U.S. Treasury yields on the longer end of the yield curve drifted lower on Thursday as stocks fell and the auction yield for 10-year Treasury-Inflation Protected Securities (TIPS) hit an all-time low. The benchmark 10-year yield was last down 1.4 basis points at 0.5807%. The $14 billion of 10-year TIPS were sold at -0.930%, the lowest yield ever in an auction of that security. TIPS yields are equal to relevant Treasury yields minus expected annual inflation, making them a market indicator of real interest rates. The bid-to-cover ratio, a metric of overall demand, was 2.24. The auction went "pretty well," according to Tom Simons, a money market economist at Jefferies in New York. "The direct bid was a little soft, which is not all that unusual in recent times," he said, adding there was a strong take down on the indirect bid side. A rush into TIPS has pushed yields to near historic lows amid an uptick in inflation expectations. The 10-year TIPS yield was last at -0.881%. "With the amount of stimulus that's out there, it's hard to believe that there's not some inflation that's going to come out of this," said John Mousseau, president and CEO of Cumberland Advisors. The latest weekly jobless claims data, which showed initial claims rising for the first time since late March did little to jar the market, which was closely following ongoing talks in Washington over the next round of aid to combat the economic fallout from the coronavirus pandemic. "We're waiting for more direction on what's going on with potential stimulus. We get bits and pieces of headlines here and there that's not helpful for the market finding direction," Simons said. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up less than a basis point at 0.1493%. A closely-watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, which is viewed as an indicator of economic expectations, was last at 43 basis points, about 1.4 basis point lower than at Wednesday's close. July 23 Thursday 1:43PM New York / 1843 GMT Price Current Net Yield % Change (bps) Three-month bills 0.1125 0.1141 -0.008 Six-month bills 0.1325 0.1344 0.002 Two-year note 99-244/256 0.1493 0.002 Three-year note 99-222/256 0.1698 0.000 Five-year note 99-236/256 0.2659 -0.003 Seven-year note 100-108/256 0.4382 -0.009 10-year note 100-108/256 0.5807 -0.014 20-year bond 101-196/256 1.0263 -0.038 30-year bond 100-24/256 1.2462 -0.044 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.00 -0.25 spread U.S. 3-year dollar swap 4.50 -0.25 spread U.S. 5-year dollar swap 3.25 0.00 spread U.S. 10-year dollar swap -1.50 0.50 spread U.S. 30-year dollar swap -43.75 2.75 spread (By Karen Pierog Editing by Nick Zieminski and Cynthia Osterman)

TREASURIES-Yields fall ahead of TIPS auction

Jul 23 2020

By Karen Pierog CHICAGO, July 23 U.S. Treasury yields on the longer end of the yield curve drifted lower on Thursday as stocks fell and the market awaited an auction of $14 billion of 10-year Treasury-Inflation Protected Securities (TIPS). The benchmark 10-year yield was last down 1.4 basis points at 0.5807%. A rush into TIPS has pushed yields to near historic lows amid an uptick in inflation expectations. The 10-year TIPS yield was last at -0.909%. "With the amount of stimulus that's out there, it's hard to believe that there's not some inflation that's going to come out of this," said John Mousseau, president and CEO of Cumberland Advisors, who advised caution on the timing of buying TIPS given the low yields. More talks were on tap on Thursday between the White House and lawmakers over the next round of stimulus measures to combat the economic fallout from the coronavirus outbreak. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up less than a basis point at 0.1493%. A closely-watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, which is viewed as an indicator of economic expectations, was last at 43 basis points, about 1.4 basis point lower than at Wednesday's close. July 23 Thursday 9:29AM New York / 1429 GMT Price Current Net Yield % Change (bps) Three-month bills 0.115 0.1166 -0.005 Six-month bills 0.1325 0.1344 0.002 Two-year note 99-244/256 0.1493 0.002 Three-year note 99-222/256 0.1698 0.000 Five-year note 99-234/256 0.2675 -0.001 Seven-year note 100-108/256 0.4382 -0.009 10-year note 100-108/256 0.5807 -0.014 20-year bond 101-140/256 1.0384 -0.026 30-year bond 99-192/256 1.2601 -0.030 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.00 -0.25 spread U.S. 3-year dollar swap 4.75 0.00 spread U.S. 5-year dollar swap 3.25 0.00 spread U.S. 10-year dollar swap -1.75 0.25 spread U.S. 30-year dollar swap -45.50 1.00 spread (By Karen Pierog Editing by Nick Zieminski)

TREASURIES-Underwhelming 20-year bond auction brings long yields off session lows

Jul 22 2020

(Recasts, updates yields; adds bond auction results, analyst comments, upcoming TIPS auction) By Karen Pierog CHICAGO, July 22 Yields of long-term U.S. Treasuries bounced off session lows on Wednesday after an auction of $17 billion of 20-year bonds that analysts dubbed neutral to a bit weak. The benchmark 10-year yield was last down 1.3 basis points at 0.5938%, while the 20-year bond yield , which tumbled as low as 1.046% before the auction, was last down 1.9 basis points at 1.0636%. The auction, the third since the U.S. Treasury offered 20-year bonds in May for the first time since 1986, resulted in a high yield of 1.059%. The bid-to-cover ratio, a metric of overall demand, was 2.43, lower than in the previous two auctions, according to analysts. "I think the view of the auction is probably neutral," said Tony Rodriguez, head of fixed income strategy at Nuveen, adding that the sale did well in light of low rates and coming supply of long-term debt. "That just speaks to the demand that there is for long end duration," he said. The 20-year bonds began trading on May 21 at a yield of 1.177%. On Thursday, $14 billion of 10-year Treasury-Inflation Protected Securities (TIPS) will be auctioned. Jim Vogel, an interest rate strategist at FHN Financial in Memphis, Tennessee, said with Treasury trading "slowed to a crawl," there was not a fundamental reason for any big moves in yields until a deal on the next round of economic aid emerges in Washington or the U.S Federal Reserve, which meets next week, changes some of its outlook. U.S. Republicans and Democrats remained far apart on how much to spend on stimulus efforts to combat the economic fallout from the coronavirus pandemic. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, which is viewed as an indicator of economic expectations, was last at 44.70 basis points, about 1 basis point lower than at Tuesday's close. July 22 Wednesday 1:32PM New York / 1832 GMT Price Price Current Net Yield % Change (bps) Three-month bills 0.12 0.1217 -0.002 Six-month bills 0.13 0.1319 -0.002 Two-year note 99-245/256 0.1472 0.004 Three-year note 99-224/256 0.1671 0.000 Five-year note 99-234/256 0.2675 -0.003 Seven-year note 100-96/256 0.445 -0.009 10-year note 100-76/256 0.5938 -0.013 20-year bond 101-24/256 1.0636 -0.019 30-year bond 98-248/256 1.2918 -0.021 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.50 -0.50 spread U.S. 3-year dollar swap 5.00 -0.25 spread U.S. 5-year dollar swap 3.25 -0.50 spread U.S. 10-year dollar swap -2.00 0.25 spread U.S. 30-year dollar swap -46.50 0.50 spread (By Karen Pierog in Chicago; editing by Jonathan Oatis)

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