April 27, 2020 / 2:31 PM / a month ago

TREASURIES-Yields inch higher ahead of note auctions

    By Karen Pierog
    CHICAGO, April 27 - U.S. Treasury yields rose on Monday as
the market looked ahead to the day's looming note auctions as
well as this week's meeting of the Federal Reserve and its take
on the economic impact of the coronavirus outbreak.
    The benchmark 10-year yield was up 4.9 basis
points at 0.6447%.
    Jim Vogel, senior rates strategist at FHN Financial in
Memphis, said the U.S. Treasury's sale of $43 billion of
five-year notes later on Monday will be closely watched.
    "It's the only part of the curve that's really close to
maybe signaling higher rates," he said. 
    Also up for auction on Monday are $42 billion of two-year
    After the Bank of Japan announced more stimulus measures on
Monday, focus this week will turn to the Federal Reserve's
    Vogel said the macro picture from the Fed may be "a bit
bleaker" than the markets have been regarding reopenings and
recoveries in the face of the virus.
    "If (Fed Chairman Jerome) Powell chooses to emphasize
messages about a slow rebound in 2021, that could be a news item
from Wednesday and that will reverberate a little bit based on
where Q1 GDP comes in," he said.
    More states are poised this week to begin loosening
restrictions on businesses even as ways to systematically screen
for the virus were lacking. The number of known U.S. infections
topped 960,000 on Sunday with deaths surpassing 54,700.

    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was last up 2.2
basis points to 0.2385%.
    In repurchase agreement (repo) operations on Monday, the New
York Federal Reserve said it accepted all $200 million in bids
for a 29-day operation. No bids were submitted for an overnight
repo operation meant to keep the federal funds rate within the
target range. 
  April 27 Monday 9:08 AM New York / 1308 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.12         0.122     0.000
 Six-month bills               0.1525       0.1547    0.013
 Two-year note                 100-67/256   0.2385    0.022
 Three-year note               99-224/256   0.2924    0.031
 Five-year note                100-122/256  0.4021    0.038
 Seven-year note               100-120/256  0.5559    0.046
 10-year note                  108-28/256   0.6447    0.049
 30-year bond                  119-92/256   1.2228    0.044
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap        13.50        -2.75    
 U.S. 3-year dollar swap         8.00        -2.50    
 U.S. 5-year dollar swap         5.50        -1.75    
 U.S. 10-year dollar swap        1.50        -1.25    
 U.S. 30-year dollar swap      -42.75         0.00    

 (By Karen Pierog in Chicago)
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