April 29, 2020 / 7:45 PM / a month ago

TREASURIES-Yields mixed as Fed keeps interest rates near zero

 (Recasts, updates yields, adds Fed statement, analyst comments)
    CHICAGO, April 29 - U.S. Treasury yields moved in mixed
directions on Wednesday as the Federal Reserve repeated its vow
to use every tool in its toolbox to rescue the
coronavirus-ravaged economy.
    The benchmark 10-year yield was last up 1.2
basis points at 0.6221%.
    The U.S. central bank left interest rates near zero and said
the ongoing pandemic will "weigh heavily" on the near-term
outlook and poses "considerable risks" for the medium term.

    Tony Rodriguez, head of fixed income strategy at Nuveen,
said what was missing from the Fed was specificity. 
    "The good news is okay they're flexible, they're not going
to be rigid, they're not going stop the balance sheet at $7
trillion so we only have X-amount more - that's all positive.
But then you have to take a step back and say, 'okay that means
we really have no clue,'" he said.
    As for the bond market, Rodriguez said it was not pointing
at a V-shape or strong recovery and was instead still signaling
risk and "still very supported by the Fed purchases."
     Earlier on Wednesday, the U.S. Commerce Department reported
a steeper-than-expected economic contraction in the first
quarter as shutdowns due to coronavirus outbreak began. The
advance first quarter gross domestic product fell at a 4.8%
annual rate, exceeding economists' forecasts of 4.0%.

    "Ultimately, the market knew this was bad, didn't know the
exact number, but knew that it was a significant negative
leading to what will be a more significant negative," said
Justin Hoogendoorn, head of the fixed income strategic analytics
at Piper Sandler in Chicago.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was last down 1
basis point at 0.1994%.
   April 29 Wednesday 2:07PM New York / 1907 GMT
                               Price                  
 US T BONDS JUN0               181-14/32    -0-13/32  
 10YR TNotes JUN0              139-4/256    0         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.1          0.1017    -0.004
 Six-month bills               0.125        0.1268    -0.013
 Two-year note                 99-218/256   0.1994    -0.010
 Three-year note               100          0.25      -0.016
 Five-year note                100-20/256   0.3592    -0.010
 Seven-year note               99-218/256   0.5216    0.000
 10-year note                  108-84/256   0.6221    0.012
 30-year bond                  118-240/256  1.238     0.031
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        12.50        -1.50    
 spread                                               
 U.S. 3-year dollar swap         7.50        -0.75    
 spread                                               
 U.S. 5-year dollar swap         4.50        -1.00    
 spread                                               
 U.S. 10-year dollar swap        0.50         0.00    
 spread                                               
 U.S. 30-year dollar swap      -44.00         0.00    
 spread                                               
    

 (By Karen Pierog in Chicago
Editing by Nick Zieminski)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below