July 23, 2020 / 2:52 PM / 17 days ago

TREASURIES-Yields fall ahead of TIPS auction

    By Karen Pierog
    CHICAGO, July 23 (Reuters) - U.S. Treasury yields on the
longer end of the yield curve drifted lower on Thursday as
stocks fell and the market awaited an auction of $14 billion of
10-year Treasury-Inflation Protected Securities (TIPS). 
    The benchmark 10-year yield was last down 1.4
basis points at 0.5807%.
    A rush into TIPS has pushed yields to near historic lows
amid an uptick in inflation expectations. The
10-year TIPS yield was last at -0.909%.
    "With the amount of stimulus that's out there, it's hard to
believe that there's not some inflation that's going to come out
of this," said John Mousseau, president and CEO of Cumberland
Advisors, who advised caution on the timing of buying TIPS given
the low yields. 
    More talks were on tap on Thursday between the White House
and lawmakers over the next round of stimulus measures to combat
the economic fallout from the coronavirus outbreak.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up less than
a basis point at 0.1493%.
    A closely-watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, which is viewed as an indicator of
economic expectations, was last at 43 basis points, about 1.4
basis point lower than at Wednesday's close.
    July 23 Thursday 9:29AM New York / 1429 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.115        0.1166    -0.005
 Six-month bills               0.1325       0.1344    0.002
 Two-year note                 99-244/256   0.1493    0.002
 Three-year note               99-222/256   0.1698    0.000
 Five-year note                99-234/256   0.2675    -0.001
 Seven-year note               100-108/256  0.4382    -0.009
 10-year note                  100-108/256  0.5807    -0.014
 20-year bond                  101-140/256  1.0384    -0.026
 30-year bond                  99-192/256   1.2601    -0.030
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.00        -0.25    
 spread                                               
 U.S. 3-year dollar swap         4.75         0.00    
 spread                                               
 U.S. 5-year dollar swap         3.25         0.00    
 spread                                               
 U.S. 10-year dollar swap       -1.75         0.25    
 spread                                               
 U.S. 30-year dollar swap      -45.50         1.00    
 spread                                               
                                                      
 
 (By Karen Pierog
Editing by Nick Zieminski)
  
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