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TREASURIES-Yields fall as global risk appetite fades on stock sell-off
December 6, 2017 / 2:24 PM / in 12 days

TREASURIES-Yields fall as global risk appetite fades on stock sell-off

    By Gertrude Chavez-Dreyfuss
    NEW YORK, Dec 6 (Reuters) - U.S. Treasury yields fell across
the board on Wednesday as risk appetite slid after a global
sell-off in equities, with investors looking for the next
positive driver to push yields higher.
    "This market is like a junkie, waiting for the next fix,"
said Bruno Braizinha, interest rates strategist at Societe
Generale in New York.
    "All the good news seems to have been priced in: the U.S.
tax reform, the Federal Reserve hike next month and next year.
So now the market is waiting for the next positive thing," he
added.
    A sell-off in technology stocks on concerns about high
valuations spread around the world and dampened global risk
sentiment.
    A slightly better-than-expected U.S. private-sector
employment report briefly pushed yields higher, but it was not
enough to turn things around.
    The ADP National Employment Report showed U.S. private
employers created 190,000 jobs in November, down sharply from
the month before and roughly in line with economists'
expectations of a gain of 185,000.
    "ADP hasn't had a very good track record recently of
predicting private nonfarm payrolls, overestimating half of the
time and underestimating the other half," said Ian Lyngen, head
of U.S. rates strategy at BMO Capital Markets in New York.
    "That isn't surprising however, in light of the different
impact of the hurricanes on the respective series."
    The ADP figures came ahead of the U.S. Labor Department's
more comprehensive nonfarm payrolls report on Friday, which
includes both public- and private-sector employment. 
    U.S. benchmark 10-year yields were down at 2.329 percent
, from 2.356 percent late on Tuesday, while the
two-year slid to 1.806 percent, from Tuesday's 1.826 percent
.
    U.S. 30-year yields, meanwhile, dropped to three-month lows
and were last at 2.714 percent, down from 2.732
percent on Tuesday.
    Data showing U.S. unit labor costs were much weaker than
initially thought, declining both in the second and third
quarters of this year, also weighed on yields, analysts said.
The report suggested inflation could remain tepid for some time.
    Unit labor costs, the price of labor per single unit of
output, dropped at a 0.2 percent annualized rate in the last
quarter instead of increasing at a 0.5 percent pace as reported
last month.
    
      December 6 Wednesday 9:15AM New York / 1415 GMT
                               Price                  
 US T BONDS MAR8               154-6/32     0-15/32   
 10YR TNotes MAR8              124-148/256  0-60/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.29         1.3122    -0.003
 Six-month bills               1.4475       1.4784    -0.006
 Two-year note                 99-228/256   1.8064    -0.020
 Three-year note               99-140/256   1.9091    -0.027
 Five-year note                99-112/256   2.1196    -0.031
 Seven-year note               99-40/256    2.2563    -0.027
 10-year note                  99-76/256    2.3296    -0.026
 30-year bond                  100-184/256  2.7147    -0.017
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        17.50         0.25    
 spread                                               
 U.S. 3-year dollar swap        16.75         0.25    
 spread                                               
 U.S. 5-year dollar swap         5.75         0.50    
 spread                                               
 U.S. 10-year dollar swap        1.50         0.25    
 spread                                               
 U.S. 30-year dollar swap      -20.25         0.00    
 spread                                               
 
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Jonathan
Oatis)
  

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