* 10-yr yields fall to 2.314 pct, lowest since Feb. 24
* Yields edge off lows on profit-taking, reinstated short
By Sam Forgione
NEW YORK, April 4 Benchmark U.S. Treasury yields
touched their lowest in more than five weeks on Tuesday before
edging higher to trade little changed on doubts about the
ability of U.S. President Donald Trump to win enactment of
Yields on benchmark 10-year notes dropped to 2.314 percent,
their lowest since Feb. 24, with analysts saying that Trump's
failure to achieve passage of a bill to overhaul the U.S.
healthcare system last month could portend similar difficulties
turning campaign pledges, including tax reform, into successful
Yields on seven- and five-year Treasuries also fell to more
than five-week lows of 2.123 percent and 1.840 percent,
respectively, while three-year yields touched Monday's nearly
five-week low of 1.437 percent. Yields on 30- and two-year
Treasuries did not breach Monday's lows.
Analysts said traders reinstated short bets against
Treasuries or took profits on long positions once 10-year yields
neared a key resistance level of 2.31 percent. That led yields
to edge off their lows later in U.S. morning trading to last
stand only slightly lower on the day.
"People are starting to lose a little bit of faith in
Trump’s agenda," said Justin Hoogendoorn, head of fixed income
strategy at Piper Jaffray in Chicago.
Analysts additionally cited the challenges facing Trump's
Supreme Court nominee, Neil Gorsuch, as an additional source of
doubt that the new administration will be able to achieve its
Democratic Senator Chris Coons on Monday announced
opposition to the nominee, ensuring Democrats can block a U.S.
Senate confirmation vote to give Gorsuch a seat on the high
Yields also edged off their lows, however, as some traders
considered the bid for Treasuries overdone.
"The market is getting ahead of itself," said Charles
Comiskey, head of Treasuries trading at Bank of Nova Scotia in
New York, in reference to the drop in yields. "All you’re seeing
today is some profit-taking on longs."
U.S. 10-year notes were last up just 3/32 in
price to yield 2.337 percent, from a yield of 2.350 percent late
U.S. 30-year bonds were last up 6/32 in price to
yield 2.973 percent, from a yield of 2.984 percent late Monday.
Two-year notes last yielded 1.246 percent, compared
with 1.242 percent late Monday.
April 4 Tuesday 10:49AM New York / 1449 GMT
US T BONDS JUN7 152-1/32 0-9/32
10YR TNotes JUN7 125-24/256 0-16/256
Price Current Net
Yield % Change
Three-month bills 0.79 0.8026 0.003
Six-month bills 0.9025 0.9192 -0.005
Two-year note 100-2/256 1.246 0.004
Three-year note 100-124/256 1.4561 -0.003
Five-year note 100-6/256 1.87 -0.007
Seven-year note 99-212/256 2.1516 -0.009
10-year note 99-60/256 2.3372 -0.013
30-year bond 100-128/256 2.9745 -0.010
DOLLAR SWAP SPREADS
Last (bps) Net
U.S. 2-year dollar swap 33.75 -1.50
U.S. 3-year dollar swap 29.75 -1.25
U.S. 5-year dollar swap 11.75 -0.50
U.S. 10-year dollar swap -2.00 -0.25
U.S. 30-year dollar swap -38.75 -0.25
(Reporting by Sam Forgione; Eduiting by Steve Orlofsky)