April 2, 2019 / 2:09 PM / 3 months ago

TREASURIES-U.S. yields slip on Brexit jitters, technical buying

    * U.S. durables goods orders fall in February
    * Messy Brexit talk spurs safe-haven demand for bonds
    * U.S. 10-year yield above 2.50% Monday attracts buying

 (Updates market action, adds quotes)
    By Richard Leong
    NEW YORK, April 2 (Reuters) - U.S. Treasury yields fell on
Tuesday with benchmark yields pulling back from one-week highs
as a result of buying from bargain-minded investors and
safe-haven demand on renewed worries about Brexit.
    A U.S. government report showing a decline in domestic
durable goods orders in February supported the view that the
U.S. economy was losing momentum in the first quarter, spurring
bids for government securities.
    "The strength behind the Treasury market right now is
evident when we reach certain support levels, like 2.50% on the
10-year note," said Kevin Giddis, head of fixed income capital
markets at Raymond James in Memphis, Tennessee.
    Treasury yields retreated after posting their biggest
single-day jump in three months on Monday, prompted by upbeat
factory data in China and the United States. 
    The reports from the world's two biggest economies ignited a
rally in stock prices around the world and reduced the appeal of
low-yielding bonds.
    "Yesterday was about better-than-expected numbers, today is
about weaker-than-expected numbers with a technical twist,"
Giddis said.
    At 9:47 a.m. (1347 GMT), the yields on benchmark 10-year
Treasury notes were 2.483%, down 1.4 basis points on
the day. On Monday, it reached 2.5080%, the highest since March
22.
    The Commerce Department said on Tuesday that total orders
for durable goods tumbled 1.6 percent in February, led by a 4.8
percent drop in demand for transportation equipment. They edged
up 0.1 percent in January.
    Jitters about the world economy were also stoked by no
breakthrough in negotiations for Britain to leave the European
Union, analysts said.
    EU officials said on Tuesday the prospect of Britain leaving
the economic bloc without a deal in 10 days time was growing as
UK Prime Minister Theresa May summoned ministers to try to
clinch approval for her deal, which has been rejected three
times by lawmakers.
    May is expected to put her deal up for a vote again this
week.
    
    April 2 Tuesday 9:47AM New York / 1347 GMT
                               Price                  
 US T BONDS JUN9               148-10/32    3/32      
 10YR TNotes JUN9              123-204/256  6/32      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             2.38         2.428     -0.014
 Six-month bills               2.3825       2.4517    -0.002
 Two-year note                 99-230/256   2.3024    -0.025
 Three-year note               100-86/256   2.2564    -0.031
 Five-year note                99-62/256    2.2865    -0.025
 Seven-year note               99-50/256    2.3756    -0.025
 10-year note                  101-60/256   2.483     -0.014
 30-year bond                  102-64/256   2.887     -0.003
         YIELD CURVE           Last (bps)   Net       
                                            Change    
                                            (bps)     
 10-year vs 2-year yield       17.90        1.30      
 30-year vs 5-year yield       60.00        3.20      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        11.75        -1.00    
 spread                                               
 U.S. 3-year dollar swap         8.75        -1.50    
 spread                                               
 U.S. 5-year dollar swap         4.50        -0.50    
 spread                                               
 U.S. 10-year dollar swap       -0.75        -0.75    
 spread                                               
 U.S. 30-year dollar swap      -24.50        -0.75    
 spread                                               
 
    

    
 (Reporting by Richard Leong; Editing by Jeffrey Benkoe)
  
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