July 28, 2020 / 2:20 PM / 18 days ago

TREASURIES-Yields lower as investors await Washington relief deal

    By Ross Kerber
    July 28 (Reuters) - Longer-term U.S. Treasury yields fell on
Tuesday as investors waited for Washington lawmakers to reach a
deal on coronavirus relief and took stock of mixed corporate
earnings reports.
    The benchmark 10-year yield was down 1.9 basis
points at 0.5905% in morning trading. The note reached as high
as 0.637% earlier in the session.    
    The decline came as traders bought back into the safe-haven
securities and moved away from riskier bets on stocks, while a
rally in gold prices also cooled off, said FHN Financial
interest rate strategist Jim Vogel.
    "There's been a big decline in momentum in speculative ideas
like gold and some earnings disappointments," he said. Yields
also ticked down after an announcement by the U.S. Federal
Reserve that it will extend several lending facilities through
the end of the year.
    U.S. Senate Republicans announced on Monday a $1 trillion
coronavirus aid package hammered out with the White House, but
the proposal sparked immediate opposition from Democrats who
decried it as too limited and some Republicans who called it too
    Wall Street's main indexes opened lower as investors 
weighing a mixed batch of earnings reports from blue-chip
    The U.S. Treasury is scheduled to auction $44 billion of
7-year notes later on Tuesday.
    The Fed is expected to reiterate its accommodative stance
when it wraps up its two-day policy meeting on Wednesday
    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 44 basis points, about 2 basis points lower
than on Monday's close.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was down 1.3
basis points at 0.1426%.
      July 28 Tuesday 10:05AM New York / 1405 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.11         0.1116    0.000
 Six-month bills               0.13         0.1323    0.000
 Two-year note                 99-247/256   0.1426    -0.013
 Three-year note               99-224/256   0.1673    -0.016
 Five-year note                99-230/256   0.2705    -0.019
 Seven-year note               100-102/256  0.4415    -0.017
 10-year note                  100-84/256   0.5905    -0.019
 20-year bond                  101-228/256  1.0193    -0.021
 30-year bond                  100-112/256  1.2324    -0.020
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         7.25         1.00    
 U.S. 3-year dollar swap         5.50         1.00    
 U.S. 5-year dollar swap         3.50         0.25    
 U.S. 10-year dollar swap       -1.00         0.00    
 U.S. 30-year dollar swap      -41.00         0.25    

 (Reporting by Ross Kerber in Boston
Editing by Nick Zieminski)
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