April 15, 2019 / 2:55 PM / a month ago

TREASURIES-U.S. long-dated yields fall in holiday-shortened week

    By Gertrude Chavez-Dreyfuss
    NEW YORK, April 15 (Reuters) - U.S. long-dated Treasury
yields fell from four-week highs on Monday in choppy trading,
ahead of U.S. data in a holiday-shortened week that will give
some guidance on whether the world's largest economy could tip
into recession in the near future.
    Financial markets are closed on Friday for the Good Friday
holiday.
    After hitting a roughly 14-month low around late March,  
U.S. benchmark 10-year and 30-year yields have risen about 17
and 16 basis points respectively.
    "I think you will see that by the end of the week all these
fears about a near-term recession that was so prevalent a few
months ago will largely vanish," Stan Shipley, fixed income
strategist at Evercore ISI in New York, said.
    "For now, we're sort of in a standstill until we see how the
data this week turns out," he added.
    U.S. retail sales and housing data are due this week and
Shipley believes those numbers will show a far more stable
economy than many initially thought.
    Shipley said that the Treasury market has lagged the
recovery seen in other markets such as stocks and commodities
fueled by improved sentiment about U.S. economic prospects.  In
due course, U.S. yields will rise, he added.
    Due to the short week, liquidity and activity are likely on
the light side, analysts said.
    "As a result, it follows that we will continue to monitor
risk asset performance to provide incremental trading guidance
for the Treasury market, at least for the moment," BMO Capital
Markets said in a research note.
    "In that vein, the start to earnings season was rather
impressive as the banks appear to be doing relatively well,
adding to some upward pressure on the equity market as the S&P
500 nears a return to record levels," it added.
    In late morning trading, U.S. 10-year note yields slipped to
2.557%, down from 2.56% late on Friday.
    Yields on U.S. 30-year bonds were also lower at 2.967%
, down from 2.971% on Friday.
    On the short end of the curve, U.S. 2-year yields edged up
to 2.399%, compared with Friday's 2.396%.
    
      April 15 Monday 10:36AM New York / 1436 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             2.3825       2.4294    -0.012
 Six-month bills               2.39         2.452     -0.012
 Two-year note                 99-186/256   2.3936    -0.002
 Three-year note               99-176/256   2.3586    0.000
 Five-year note                98-220/256   2.3702    -0.005
 Seven-year note               98-176/256   2.4563    -0.010
 10-year note                  100-164/256  2.5507    -0.009
 30-year bond                  100-200/256  2.9603    -0.011
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         9.75         0.00    
 spread                                               
 U.S. 3-year dollar swap         6.75         0.25    
 spread                                               
 U.S. 5-year dollar swap         3.25         0.25    
 spread                                               
 U.S. 10-year dollar swap       -1.25         0.50    
 spread                                               
 U.S. 30-year dollar swap      -24.50         0.50    
 spread                                               
 
 (Reporting by Gertrude Chavez-Dreyfuss
Editing by Susan Thomas)
  
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