* Investors await Trump speech to joint session of Congress
* Yields rise from at least two-week lows hit Friday
By Sam Forgione
NEW YORK, Feb 27 U.S. Treasury yields rose
modestly on Monday from multi-week lows touched Friday on
anticipation that any references to pro-growth economic policies
in a speech by U.S. President Donald Trump on Tuesday could
drive yields higher.
Treasury Secretary Steven Mnuchin said on Sunday that Trump
would use a major policy speech to a joint session of Congress
to preview some elements of his sweeping plans to cut taxes for
the middle class, simplify the tax system and make U.S.
companies more globally competitive, with lower rates and
changes to encourage U.S. manufacturing.
Analysts said investors were adjusting positions after
growing bullish on Treasuries last Friday, when benchmark
10-year note yields slumped to 2.31 percent, their
lowest level in more than five weeks. Those yields rose to a
session high of 2.345 percent on Monday.
"There is setting up for what people expect might be at
least a focus on things like fiscal stimulus and infrastructure
spending of some kind, that might actually boost risk and cause
yields to rise," said Aaron Kohli, an interest rate strategist
at BMO Capital Markets in New York.
Trump said on Monday he is seeking a "historic increase" in
military spending to be funded by cuts elsewhere in government
and that he would talk about his plans for infrastructure
spending on Tuesday.
Yields on Treasuries maturing at other than 10 years had hit
more than two-week lows Friday and also rose Monday. U.S.
30-year bonds, which hit their lowest since Feb. 9
on Friday of 2.948 percent, rose to a session high of 2.973
percent Monday. U.S. three-year notes, which hit
their lowest since Feb. 7 Friday of 1.388 percent, hit 1.426
Yields move inversely to prices.
"If anything, it’s a little bit of a bounce-back" in yields,
said Justin Hoogendoorn, head of fixed income strategy at Piper
Jaffray & Co in Chicago.
U.S. 10-year Treasury notes were last down 7/32 in price to
yield 2.342 percent, from a yield of 2.317 percent late Friday.
Two-year notes were last down 1/32 in price to yield
1.169 percent, from a yield of 1.145 percent late Friday.
(Reporting by Sam Forgione; Editing by Nick Zieminski)