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TREASURIES-Yields inch higher as investors look to U.S. non-farm payrolls
October 5, 2017 / 1:50 PM / 16 days ago

TREASURIES-Yields inch higher as investors look to U.S. non-farm payrolls

    By Gertrude Chavez-Dreyfuss
    NEW YORK, Oct 5 (Reuters) - U.S. Treasury debt yields were
slightly higher on Thursday in choppy trading, as investors
continued to balance their positions ahead of Friday's U.S.
non-farm payrolls report for September.
    "The market is looking forward to tomorrow's payrolls even
though that number could be distorted by Hurricanes Harvey and
Irma," said Justin Lederer, Treasury analyst at Cantor
Fitzgerald in New York.
    Wall Street economists expect just 90,000 new U.S. jobs for
September, down from 156,000 in August, according to a Reuters
poll.
    Long-dated short positions in Treasuries have been stretched
and investors looked to square up ahead of a potentially
volatile trading day on Friday because of the payrolls number,
analysts said.
    A JP Morgan client survey showed that net shorts on
long-dated U.S. Treasuries rose to a record high. 
    U.S. 10-year note yields had risen about 20 basis points in
September, while 30-year bond yields climbed 13 basis points,
bolstered by an uptick in inflation and a more bullish economic
outlook from the Federal Reserve. 
    In mid-morning trading, the benchmark 10-year U.S. Treasury
note yield was at 2.339 percent, up from 2.332
percent late on Wednesday, while the 30-year yield
was at 2.881 percent, up from 2.877 percent.
    U.S. two-year note yields were up at 1.487
percent, from 1.479 percent on Wednesday.
    Data on Thursday showed underlying strength in the U.S.
economy.
    The number of Americans filing for unemployment benefits
fell more than expected last week. Initial claims for state
unemployment benefits dropped by 12,000 to a seasonally adjusted
260,000 for the week ended Sept. 30, the Labor Department said.
    The U.S. trade deficit also narrowed for the month of August
to $42.4 billion, the smallest since September 2016.            
    U.S. Treasuries, however, showed little reaction to the
data.
    
    October 5 Thursday 9:39AM New York / 1339 GMT
                               Price                  
 US T BONDS DEC7               152-15/32    -0-3/32   
 10YR TNotes DEC7              125-64/256   -0-20/25  
                                            6         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.0525       1.0699    0.000
 Six-month bills               1.1975       1.2215    0.006
 Two-year note                 99-200/256   1.4873    0.008
 Three-year note               99-72/256    1.6261    0.011
 Five-year note                99-184/256   1.9344    0.010
 Seven-year note               99-184/256   2.1686    0.010
 10-year note                  99-56/256    2.339     0.007
 30-year bond                  97-104/256   2.88      0.003
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        27.00         0.00    
 spread                                               
 U.S. 3-year dollar swap        23.75        -0.50    
 spread                                               
 U.S. 5-year dollar swap         8.25         0.00    
 spread                                               
 U.S. 10-year dollar swap       -4.25         0.00    
 spread                                               
 U.S. 30-year dollar swap      -32.50         0.00    
 spread                                               
 
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Meredith
Mazzilli)
  

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