* U.S. Treasury to sell $88 bln in coupon-bearing debt
* Concerns about stimulus delay support bids for bonds
* Bankers see $35 bln in high-grade bonds this week - IFR
* U.S. bond market to close early Friday, shut next Monday
(Updates market action, adds quote)
By Richard Leong
NEW YORK, May 22 U.S. Treasury yields were
marginally higher on Monday as light selling tied to this week's
government and corporate bond supply overrode safe-haven bids
underpinned by worries about probes into U.S. President Donald
Trump's 2016 campaign.
The U.S. Treasury Department planned to sell a combined sum
of $88 billion in two-year, five-year and seven-year debt ahead
of the Memorial Day holiday weekend.
The U.S. bond market is scheduled to close early at 2 p.m.
(1800 GMT) on Friday and will be shut on Monday.
Corporations were also tapping investors for cash with
bankers expecting $35 billion in investment-grade deals this
week, according to IFR, a Thomson Reuters unit.
Traders will also watch for clues from Federal Reserve
officials this week on whether the U.S. central bank may raise
interest rates at its June 13-14 policy meeting.
"It was very quiet today. The market is going to have a hard
time with direction this week," said Mary Ann Hurley, vice
president of fixed income trading at D.A. Davidson in Seattle.
Over 821,000 10-year Treasury futures contracts changed
hands on Monday, the lowest since April 17, CME Group data
As some investors reduced their bond holdings to make room
for the new supply, there were signs speculators increased
stakes for bond yields to fall in the wake of reports on a
widening investigation into Trump's presidential campaign and
whether it colluded with Russia last year.
Last Wednesday, the S&P 500 and the Dow suffered their
steepest one-day drops since September following reports that
Trump tried to interfere with a federal investigation of his
campaign. Investors fled into safe-haven Treasuries, pushing
benchmark yields to one-month lows.
More reports alleging possible coordination between Trump's
campaign officials and Russia have emerged.
"The headlines are not going to go away and ... the
administration's push with its economic agenda seems to be
seriously compromised," said Mike Lorizio, head of Treasuries
trading at Manulife Asset Management in Boston.
Anxiety about Trump and Republican lawmakers' ability to
deliver on promised tax cuts, looser regulations and
infrastructure spending was limited by higher stock prices.
The benchmark 10-year Treasury yield was 2.252
percent, up 0.7 basis point from Friday, while the 30-year yield
was 2.914 percent, 0.8 basis point higher.
Last Thursday, the 10-year yield hit a one-month low at
2.180 percent, while the 30-year yield fell to 2.874 percent,
the lowest level since April 21, Reuters data showed.
May 22 Monday 3:10PM New York / 1910 GMT
US T BONDS JUN7 153-26/32 -0-1/32
10YR TNotes JUN7 126-32/256 -0-16/25
Price Current Net
Yield % Change
Three-month bills 0.8875 0.9017 -0.012
Six-month bills 1.0275 1.0471 0.023
Two-year note 99-242/256 1.2786 0.000
Three-year note 100-34/256 1.4542 0.002
Five-year note 100-96/256 1.7952 0.008
Seven-year note 99-156/256 2.0606 0.008
10-year note 101-24/256 2.252 0.007
30-year bond 101-188/256 2.9128 0.007
DOLLAR SWAP SPREADS
Last (bps) Net
U.S. 2-year dollar swap 24.50 1.00
U.S. 3-year dollar swap 20.75 1.00
U.S. 5-year dollar swap 7.00 -0.25
U.S. 10-year dollar swap -7.00 -0.50
U.S. 30-year dollar swap -47.25 -0.75
(Reporting by Richard Leong; Editing by Paul Simao and Chizu