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TREASURIES-Yields edge lower on month-end buying, Trump speech awaited
February 28, 2017 / 4:05 PM / 7 months ago

TREASURIES-Yields edge lower on month-end buying, Trump speech awaited

    * Month-end portfolio rebalancing pushes yields lower
    * Prospect of Trump 9 p.m. ET speech to Congress mitigates
move
    * Treasuries set for best month since last June

    By Sam Forgione
    NEW YORK, Feb 28 (Reuters) - U.S. Treasury yields edged
lower on Tuesday on month-end buying, while investors'
wait-and-see approach ahead of an evening speech by U.S.
President Donald Trump to the U.S. Congress limited the move. 
    Trump's 9 p.m. ET (0200 GMT Wednesday) speech in the chamber
of the House of Representatives will be the Republican
president's biggest chance yet as president to command a large
prime-time audience and describe his agenda after his first
month in office.
    Investors were anxiously awaiting details on Trump's
policies in areas such as tax reform and infrastructure
spending, analysts said. Anticipation of the speech mitigated
the move lower in yields, which occurred on the back of
month-end portfolio rebalancing. 
    "People need more concrete evidence about the fiscal side of
the equation," said Charles Comiskey, head of Treasuries trading
at Bank of Nova Scotia in New York. 
    White House spokesman Sean Spicer said the theme of the
speech to the Republican-controlled Congress would be "the
renewal of the American spirit" and that it would be grounded in
how to solve the problems of everyday Americans. 
    Benchmark 10-year U.S. Treasury notes were last
up 4/32 in price to yield 2.351 percent. Yields on the notes hit
a session low of 2.345 percent in morning U.S. trading, down
about two basis points from late Monday. 
    Details from Trump on pro-growth policies could influence
the near-term direction of U.S. government bond yields, analysts
said. The Bloomberg Barclays U.S. Treasury Index was last set to
gain 0.47 percent in February to mark the strongest month since
last June. 
    Benchmark 10-year yields tumbled to a more than five-week
low on Friday of 2.31 percent, pressured by declines in European
yields amid persistent political uncertainty and a soft batch of
U.S. data that suggested a more mixed outlook for the world's
largest economy.
    "We’re waiting for the president," said Justin Lederer, an
interest rate strategist at Cantor Fitzgerald in New York.
"Everyone is going to watch everything (Trump) says tonight." 
    Lederer said month-end buying was in particular boosting
prices and pushing yields lower on longer-dated Treasuries. 
    U.S. 30-year Treasury bonds were last up 8/32 in
price to yield 2.972 percent, from a yield of 2.985 percent late
Monday. The yields touched a session low of 2.966 percent. 
    U.S. two-year notes were last roughly flat in
price to yield 1.193 percent, from a yield of 1.204 percent late
Monday. 
February 28 Tuesday 10:55AM New York / 1555 GMT
                               Price                  
 US T BONDS MAR7               152-28/32    0-8/32    
 10YR TNotes MAR7              125-60/256   0-24/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.5225       0.5305    0.002
 Six-month bills               0.6825       0.6944    0.002
 Two-year note                 99-224/256   1.1885    -0.015
 Three-year note               99-208/256   1.4398    -0.019
 Five-year note                100-26/256   1.8536    -0.014
 Seven-year note               99-184/256   2.1685    -0.015
 10-year note                  99-20/256    2.3543    -0.013
 30-year bond                  100-132/256  2.9738    -0.011
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        35.75         0.00    
 spread                                               
 U.S. 3-year dollar swap        28.75        -0.25    
 spread                                               
 U.S. 5-year dollar swap        11.75        -0.50    
 spread                                               
 U.S. 10-year dollar swap       -3.00        -0.50    
 spread                                               
 U.S. 30-year dollar swap      -38.75        -0.50    
 spread                                               
 
 (Reporting by Sam Forgione; Editing by Frances Kerry)
  

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