January 16, 2020 / 3:20 PM / 2 days ago

TREASURIES-U.S. yields tick up on strong bank earnings, manufacturing data

    By Ross Kerber
    BOSTON, Jan 16 (Reuters) - U.S. Treasury yields rose
slightly on Thursday on strong economic data and bank earnings.
    The benchmark 10-year yield was up 1.2 basis
points in morning trading at 1.8004%.
    The increase reflected factors like a strong measure of
manufacturing in the Mid-Atlantic region and
better-than-expected retail sales, said Tom di Galoma, managing
director of Seaport Global Holdings.
    "Certainly there's a little bit of pressure" for economic
activity to continue to increase, he said.
    U.S. retail sales increased for a third straight month in
December, with households buying a range of goods even as they
cut back on purchases of motor vehicles, the Commerce Department
said on Thursday.
    Other data on Thursday showed the number of Americans filing
claims for unemployment benefits dropped for a fifth straight
week last week, indicating the labor market remained strong
despite a recent slowdown in job growth. 
    The Federal Reserve Bank of Philadelphia's business
conditions index for the U.S. Mid-Atlantic region rose to 17.0
from an upwardly revised 2.4 in December. That easily topped
expectations for a reading of 3.8 in January, according to a
Reuters poll of economists.
    U.S. stock indexes opened at new highs on optimism over an
initial U.S.-China trade deal and a positive start to the
fourth-quarter earnings season.
    Morgan Stanley reported a 46% jump in quarterly
profit and beat Wall Street estimates by a wide margin, the
latest sign that Chief Executive James Gorman's strategic vision
for the Wall Street bank is bearing fruit.         
  
    The two-year  U.S. Treasury yield, which
typically moves in step with interest rate expectations, was up
less than a basis point at 1.5698% in morning trading.
    
      January 16 Thursday 10:11AM New York / 1511 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.5275       1.5589    -0.010
 Six-month bills               1.53         1.5676    -0.005
 Two-year note                 100-27/256   1.5698    0.008
 Three-year note               99-198/256   1.5778    0.011
 Five-year note                100-160/256  1.6181    0.015
 Seven-year note               100-40/256   1.726     0.013
 10-year note                  99-140/256   1.8004    0.012
 30-year bond                  102-188/256  2.2486    0.007
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.75        -0.25    
 spread                                               
 U.S. 3-year dollar swap         3.25        -0.25    
 spread                                               
 U.S. 5-year dollar swap         0.75        -0.25    
 spread                                               
 U.S. 10-year dollar swap       -4.50        -0.50    
 spread                                               
 U.S. 30-year dollar swap      -31.00        -0.50    
 spread                                               
 
 (Reporting by Ross Kerber in Boston; Editing by David Gregorio)
  
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