July 10, 2020 / 6:58 PM / a month ago

TREASURIES-Longer-term yields climb on optimism about COVID-19 recovery

 (Updates prices; adds details and investor comments)
    By Noel Randewich and Ross Kerber
    July 10 (Reuters) - Longer-term U.S. Treasury yields
rebounded on Friday, following Wall Street higher as optimism
about an antiviral drug to treat COVID-19 countered worries
about the economic fallout from a record rise in coronavirus
cases in the United States.  
    The yield on the benchmark 10-year U.S. Treasury note
 rose 2.8 basis points to 0.6332%, after dipping as
low as 0.569% earlier in the session - its lowest level since
April 22.  
    Gilead Sciences reported that additional data from
a late-stage study showed that its antiviral drug remdesivir
significantly improved clinical recovery and reduced the risk of
death in COVID-19 patients.
    "The market is trading on the expectation that the economy
is not going to shut down for a second time. It is looking past
the short term," said Andrew Richman, managing director of fixed
income at Truist/SunTrust Advisory Services.
    Still, more than 60,500 new COVID-19 infections were
reported across the United States on Thursday, according to a
Reuters tally, setting a one-day record.
    Robert Kaplan, president of the Federal Reserve Bank of
Dallas, in a television interview Friday said that muting the
virus' spread is key to an economic recovery, echoing similar
recent comments by other Fed policy makers.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 48 basis points, almost 2 basis points
higher than at Thursday's close. At one point it touched 42.7
basis points, the lowest level since May 4.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up less than
a basis point at 0.1549%, while the five-year yield rose 2.4
basis points to 0.2976%.
    Even with Friday's reversal, the 10-year yield was down
about 5 basis points for the week.
    "We are heading into the weekend, and investors may be
clearing their minds and just booking some profits in
fixed-income land," said Kevin Flanagan, head of fixed income
strategy at WisdomTree Asset Management in New York.
    
        July 10 Friday 11:37AM New York / 1837 GMT
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.13         0.1322    -0.002
 Six-month bills               0.1475       0.1497    -0.005
 Two-year note                 99-241/256   0.1549    0.004
 Three-year note               99-210/256   0.1851    0.010
 Five-year note                99-196/256   0.2976    0.024
 Seven-year note               100-28/256   0.484     0.030
 10-year note                  99-236/256   0.6332    0.028
 20-year bond                  100-92/256   1.1048    0.021
 30-year bond                  98-40/256    1.325     0.016
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.00         0.00    
 spread                                               
 U.S. 3-year dollar swap         4.00         0.00    
 spread                                               
 U.S. 5-year dollar swap         3.25         0.00    
 spread                                               
 U.S. 10-year dollar swap       -1.75         0.50    
 spread                                               
 U.S. 30-year dollar swap      -46.75         1.25    
 spread                                               
                                                      
 

 (Reporting by Ross Kerber in Boston and Noel Randewich in San
Francisco
Editing by Nick Zieminski and Leslie Adler)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below