March 27, 2018 / 3:22 PM / 6 months ago

TREASURIES-U.S. bond yields slip on quarter-end buying before 5-year supply

    * U.S. to sell $35 bln 5-year notes, $89 bln T-bills 
    * U.S. consumer confidence unexpectedly falls in March
    * Investors most upbeat on Treasuries since June -JPMorgan

 (Updates market action, adds quote, table)
    By Richard Leong
    NEW YORK, March 27 (Reuters) - U.S. Treasury yields fell on
Tuesday as fund managers bought bonds to rebalance their
portfolios for quarter-end in advance of more government debt
supply.
    The U.S. Treasury Department will sell $65 billion in
one-month bills; $24 billion in one-year T-bills
 and $35 billion in five-year notes.
They are part of this week's record high $294 billion in
government debt for sale.
    Monday's $30 billion two-year note issue, along with $51
billion in three-month bills and $45 billion in six-month bills,
drew mediocre demand, analysts said.
    Lingering worries about a trade war between the United
States and China have supported safe-haven demand for
Treasuries, though Wall Street stock prices rose for a second
day on Tuesday following last week's plunge tied to fears about
an escalation of trade barriers between the world's two biggest
economies.
    "Despite today’s stock market rebound, 'flight-to-quality'
sentiment may still linger given market concerns over trade
policies, which could be supportive for demand," analysts at
Nomura Securities International wrote in a research note.
    The share of investors who are bullish on longer-dated
Treasuries rose to its highest level since last June, a survey
from JPMorgan released on Tuesday showed.
    Moreover, the Conference Board said its gauge of U.S.
consumer confidence unexpectedly fell to 127.7 in March from a
revised 130.0 in February.
    At 11:01 a.m. (1501 GMT), the yield on 10-year Treasury
notes was down 2.2 basis points to 2.819 percent.
    The two-year Treasury yield was down 2.2 basis
points to 2.294 percent, while the 30-year Treasury yield
 was down 1.4 basis points to 3.057 percent.
March 27 Tuesday 11:08AM New York / 1508 GMT
                               Price                   
 US T BONDS JUN8               145-4/32     0-13/32    
 10YR TNotes JUN8              120-172/256  0-52/256   
                               Price        Current    Net
                                            Yield %    Change
                                                       (bps)
 Three-month bills             1.76         1.7925     -0.002
 Six-month bills               1.8975       1.9425     -0.003
 Two-year note                 99-234/256   2.2943     -0.022
 Three-year note               99-226/256   2.416      -0.022
 Five-year note                100-20/256   2.6078     -0.025
 Seven-year note               100-12/256   2.7423     -0.027
 10-year note                  99-104/256   2.819      -0.022
 30-year bond                  98-228/256   3.0568     -0.014
                                                       
   DOLLAR SWAP SPREADS                                 
                               Last (bps)   Net        
                                            Change     
                                            (bps)      
 U.S. 2-year dollar swap        28.50        -5.75     
 spread                                                
 U.S. 3-year dollar swap        25.50        -1.25     
 spread                                                
 U.S. 5-year dollar swap        14.25        -0.50     
 spread                                                
 U.S. 10-year dollar swap        2.75        -0.50     
 spread                                                
 U.S. 30-year dollar swap      -16.00        -0.75     
 spread                                                
 

    
 (Reporting by Richard Leong; Editing by Dan Grebler)
  
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