June 12, 2020 / 2:04 PM / a month ago

TREASURIES-Yields head higher as stocks rebound

    By Karen Pierog
    CHICAGO, June 12 (Reuters) - U.S. Treasury yields rose on
Friday as stocks were poised to erase some of the losses from
their biggest one-day drop in about three months. 
    The benchmark 10-year yield was last up 5.5
basis points at 0.7084%. 
    "It's a seesaw between optimism in the equity market and
pessimism in the bond market and that switches some times," said
Gary Pollack, managing director fixed income at Deutsche Bank
Private Wealth Management in New York. "So Treasuries have been
on a seesaw ride, but I'd call it a rather narrow seesaw ride."
    He noted that the 10-year note continues to trade in a tight
 range as Treasuries rallied after the Federal Reserve ended its
two-day meeting on Wednesday warning of a long road to recovery
and as stocks dove on Thursday amid reports of rising COVID-19
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was last up 2
basis points at 0.1989%.
   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 at 50.80 basis points, about 4 basis
points higher than at Thursday's close.
    It reached 72 basis points a week ago, the steepest since
March, after data showed the U.S. economy unexpectedly added
jobs in May. 
   Bids submitted in a Friday morning overnight repurchase
agreement (repo) operation totaled $49.2 billion, according to
the New York Federal Reserve, which said it accepted all the
    On Thursday, the Fed announced it was slightly raising the
price of the operations after seeing "substantial improvements"
in market conditions.
June 12 Friday 8:42AM New York / 1342 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.175        0.178     0.013
 Six-month bills               0.185        0.1877    0.008
 Two-year note                 99-219/256   0.1989    0.020
 Three-year note               100-16/256   0.2291    0.018
 Five-year note                99-146/256   0.3374    0.035
 Seven-year note               99-180/256   0.5435    0.049
 10-year note                  99-52/256    0.7084    0.055
 20-year bond                  97-252/256   1.2395    0.060
 30-year bond                  94-216/256   1.4634    0.060
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         7.25        -0.50    
 U.S. 3-year dollar swap         5.00         0.00    
 U.S. 5-year dollar swap         4.75        -0.25    
 U.S. 10-year dollar swap       -1.00         0.00    
 U.S. 30-year dollar swap      -48.00         0.00    

 (By Karen Pierog)
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