June 3, 2020 / 2:04 PM / a month ago

TREASURIES-Yields higher after payroll losses less than expected

    By Ross Kerber
    BOSTON, June 3 (Reuters) - U.S. Treasury yields were higher
on Wednesday after U.S. private payrolls fell by less than
expected in May as businesses reopened. 
    The benchmark 10-year yield was up 4.4 basis
points in morning trading at 0.7245%.
    Employers laid off another 2.76 million workers in May,
according to the ADP National Employment Report, following a
record 19.56 million plunge in April. Economists polled by
Reuters had forecast private payrolls dropping by 9 million in
May.
    The data propelled some movement into riskier assets,
driving up longer-term Treasury yields. But the data also was so
far off estimates that it sent a murky message about the state
of hiring and the economy, said Jim Vogel, interest rate
strategist for FHN Financial.
    "People had written off May but now we have to take a closer
look at the baseline of what really happened," he said.
     World shares hit three-month highs on Wednesday and the
dollar fell for the sixth day running as easing lockdowns and
hopes for more monetary stimulus gave investors confidence,
despite civil unrest in the United States and rising COVID-19
tolls.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 54 basis points, about 2 basis points
higher than Tuesday's close.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up 1.2 basis
points at 0.1801% in morning trading.
    
  June 3 Wednesday 9:39AM New York / 1339 GMT
                               Price                  
 US T BONDS SEP0               176-8/32     -1-3/32   
 10YR TNotes SEP0              138-128/256  -0-92/25  
                                            6         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.1525       0.1547    0.003
 Six-month bills               0.175        0.1781    0.000
 Two-year note                 99-228/256   0.1801    0.012
 Three-year note               99-178/256   0.2288    0.019
 Five-year note                99-132/256   0.348     0.029
 Seven-year note               99-160/256   0.5548    0.037
 10-year note                  99-12/256    0.7245    0.044
 30-year bond                  93-88/256    1.5278    0.049
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         7.75        -0.25    
 spread                                               
 U.S. 3-year dollar swap         4.75        -0.50    
 spread                                               
 U.S. 5-year dollar swap         4.00        -0.25    
 spread                                               
 U.S. 10-year dollar swap       -1.50        -0.25    
 spread                                               
 U.S. 30-year dollar swap      -49.25         0.00    
 spread                                               
 
 (Reporting by Ross Kerber in Boston; Editing by Bernadette
Baum)
  
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