* Capital goods orders beat expectations in October
* Treasury to sell $32 bln seven-year notes
* Treasury market closed on Thursday
By Karen Brettell
NEW YORK, Nov 27 (Reuters) - U.S. Treasury yields rose on
Wednesday after data showed that new orders for key U.S.-made
capital goods increased by the most in nine months in October,
boosting confidence that the U.S. economy is solid.
The Commerce Department said on Wednesday orders for
non-defense capital goods excluding aircraft, a closely watched
proxy for business spending plans, surged 1.2% last month, the
largest gain since January.
These so-called core capital goods orders were boosted by
increased demand for machinery, computers and electronic
products, and fabricated metals.
“The numbers certainly surprised to the upside ... there’s
been a lot of concern about weak investment,” said Gennadiy
Goldberg, an interest rate strategist at TD Securities in New
York.
However, “the problem is this is one of the most volatile
data series we have in the main U.S. data release calendar, so
it is difficult to read into it,” Goldberg said.
Risk appetite also improved after U.S. President Trump said
on Tuesday that the United States and China are close to
agreement on the first phase of a trade deal, reducing demand
for safe haven U.S. government bonds.
Benchmark 10-year note yields were last at
1.767%, up from 1.740% late Tuesday.
The Treasury Department will sell $32 billion in seven-year
notes on Wednesday, the final sale of $113 billion in
coupon-bearing supply this week.
A $40 billion sale of two-year notes on Monday and a $41
billion sale of five-year notes on Tuesday were marked by solid
demand.
The bond market will be closed on Thursday for the
Thanksgiving Day holiday.
November 27 Wednesday 9:08AM New York / 1408 GMT
Price Current Net Change
Yield % (bps)
Three-month bills 1.59 1.6185 0.013
Six-month bills 1.5875 1.6269 0.008
Two-year note 99-201/256 1.6098 0.024
Three-year note 100-14/256 1.6059 0.027
Five-year note 99-110/256 1.6193 0.031
Seven-year note 99-108/256 1.7139 0.031
10-year note 99-216/256 1.7671 0.027
30-year bond 103-212/256 2.1998 0.022
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 0.75 0.00
spread
U.S. 3-year dollar swap -3.50 0.00
spread
U.S. 5-year dollar swap -5.25 0.75
spread
U.S. 10-year dollar swap -8.75 0.25
spread
U.S. 30-year dollar swap -35.00 0.25
spread
