January 23, 2019 / 8:45 PM / in 3 months

TREASURIES-U.S. bond yields rise as Wall Street stabilizes

    * Worries about U.S.-China trade persist 
    * Treasury yields seen locked in tight trading range 
    * Wall Street's rally fades on renewed growth concerns

 (New throughout, updates prices, market activity and comments)
    By Richard Leong
    NEW YORK, Jan 23 (Reuters) - U.S. Treasury yields rose on
Wednesday as Wall Street stock prices stabilized a day after
posting heavy losses, reducing safe-haven demand for bonds even
as investors remained worried about slowing economic growth and
trade tensions.
    Analysts expect the $15.6 trillion market to trade in a
narrow range given the dearth of official U.S. economic reports
due to the longest-ever government shutdown.
    "The market is shadow-boxing with speculation about trade,"
said Ward McCarthy, chief financial economist at Jefferies & Co.
in New York.
    One hurdle to resolving the U.S.-China trade fight 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. 
    Washington will proceed with the formal extradition of
Wanzhou, while Beijing vowed to respond.
    The Trump administration and the Chinese government remain
far apart on issues. Chinese Vice Premier Liu He is scheduled to
Washington at the end of January.
    Early on Wednesday, White House economic adviser Kevin
Hassett told CNN television he believed a trade agreement
between the world's two biggest economies could be reached by a
March 1 deadline.
    Wall Street stocks rose in early trading as market players
focused on upbeat earnings from corporate stalwarts IBM, United
Technologies and Proctor & Gamble.
    The yield on benchmark 10-year Treasury notes
was 2.753 percent, up 2.1 basis points from late on Tuesday. It
reached a three-week peak at 2.799 percent last Friday.
    Yields retreated from session peaks as resurgent worries
about faltering economic growth slowed the stock market rally.
    In late trading, the S&P 500 index was down 0.04
percent, while the Dow was up 0.69 percent and the Nasdaq
was 0.26 percent lower. The Dow and S&P 500 fell more than 1
percent and the Nasdaq lost nearly 2 percent on Tuesday.
    "Stocks have faded so bonds are benefitting," said Larry
Milstein, head of government and agency trading at R.W.
Pressprich & Co. in New York.
January 23 Wednesday 3:24PM New York / 2024 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             2.36         2.4071    -0.026
 Six-month bills               2.4475       2.5126    0.000
 Two-year note                 99-211/256   2.5933    0.016
 Three-year note               99-204/256   2.5712    0.016
 Five-year note                100-42/256   2.5891    0.020
 Seven-year note               99-196/256   2.6621    0.021
 10-year note                  103-48/256   2.7516    0.020
 30-year bond                  106          3.0663    0.011
         YIELD CURVE           Last (bps)   Net       
                                            Change    
                                            (bps)     
 10-year vs 2-year yield       15.70        0.70      
 30-year vs 5-year yield       47.70        -0.40     
   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        11.75         0.50    
 spread                                               
 U.S. 5-year dollar swap         8.00        -0.25    
 spread                                               
 U.S. 10-year dollar swap        2.75        -0.25    
 spread                                               
 U.S. 30-year dollar swap      -18.25         0.50    
 spread                                               
 
 (Reporting by Richard Leong
Editing by Susan Thomas and David Gregorio)
  
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