January 23, 2019 / 4:05 PM / 4 months ago

TREASURIES-U.S. yields rise as stock market rebounds

 (Updates market action, adds quote)
    By Richard Leong
    NEW YORK, Jan 23 (Reuters) - U.S. Treasury yields rose on
Wednesday as a rebound in Wall Street stock prices pared some
safe-haven demand for U.S. government bonds even though
investors remain worried about slowing economic growth and the
U.S.-China trade tensions.
    Analysts expect the $15.6 trillion market sector to be stuck
in a trading range given the dearth of official economic reports
due to the longest-ever U.S. government shutdown.
    "The market is shadow-boxing with speculation about trade,"
said Ward McCarthy, chief financial economist at Jefferies & Co.
in New York.
    One of the hurdles to Washington and Beijing resolving their
trade spat is the case of Meng Wanzhou, executive of Chinese
technology giant Huawei, who was arrested on Dec. 1 in Vancouver
for violating U.S. sanctions on Iran. 
    The United States will proceed with the formal extradition
of Wanzhou, while Beijing vowed to respond to Washington's
actions.
    The Trump administration and the Chinese government are
still far apart on key issues for a deal to be struck ahead of a
visit by Chinese Vice Premier Liu He to Washington at the end of
January.
    Early on Wednesday, White House economic adviser Kevin
Hassett told CNN television he believed China and the United
States could reach a trade agreement by a March 1 deadline.

    Amid uncertainties about the progress on trade talks between
the world's two biggest economies, traders focused on upbeat
earnings from corporate stalwarts IBM, United Technologies and
Proctor & Gamble.
    At 10:49 a.m. (1549 GMT), the yield on benchmark 10-year
Treasury notes was 2.753 percent, down 2.1 basis
points from late on Tuesday. It reached a three-week peak at
2.799 percent last Friday.
    The S&P 500 index was up 0.38 percent, while the Dow
 was up 0.52 percent and the Nasdaq was 0.52 percent
higher. The Dow and S&P 500 fell more than 1 percent and the
Nasdaq lost nearly 2 percent on Tuesday.
January 23 Wednesday 10:47AM New York / 1547 GMT
                               Price                  
 US T BONDS MAR9               145-1/32     -12/32    
 10YR TNotes MAR9              121-100/256  -6/32     
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             2.3725       2.42      -0.013
 Six-month bills               2.45         2.5152    0.002
 Two-year note                 99-211/256   2.5933    0.016
 Three-year note               99-200/256   2.5767    0.022
 Five-year note                100-40/256   2.5908    0.022
 Seven-year note               99-192/256   2.6646    0.024
 10-year note                  103-44/256   2.7534    0.021
 30-year bond                  105-252/256  3.0671    0.012
         YIELD CURVE           Last (bps)   Net       
                                            Change    
                                            (bps)     
 10-year vs 2-year yield       15.90        0.75      
 30-year vs 5-year yield       47.50        -0.55     
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        14.75         0.25    
 spread                                               
 U.S. 3-year dollar swap        11.50         0.25    
 spread                                               
 U.S. 5-year dollar swap         8.00        -0.25    
 spread                                               
 U.S. 10-year dollar swap        3.00         0.00    
 spread                                               
 U.S. 30-year dollar swap      -18.25         0.50    
 spread                                               
 
    
    
    

 (Reporting by Richard Leong
Editing by Susan Thomas)
  
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