January 14, 2020 / 8:06 PM / 5 days ago

TREASURIES-U.S. yields tick down as investors weigh moderate CPI rise

 (Updates with market activity, adds analyst comment)
    By Ross Kerber
    BOSTON, Jan 14 (Reuters) - U.S. Treasury yields ticked down
on Tuesday as investors took stock of a moderate rise in
consumer prices and the expected signing of a trade deal between
the United States and China.
    The benchmark 10-year yield was down 2.7 basis
points in afternoon trading to 1.8214%, after beginning the
session little changed. 
    Consumer prices rose slightly less than expected in December
and monthly underlying inflation pressures retreated, which
could allow the Federal Reserve to keep interest rates unchanged
at least through this year.
    The Labor Department said on Tuesday its consumer price
index increased 0.2% last month, 10 basis points less than
expected by economists polled by Reuters.
    Stan Shipley, macro research analyst for Evercore ISI, said
the decline in Treasury yields reflected lower expectations for
increases in the prices of goods and services that might juice
economic activity.
    "There's no sign of inflation, it's completely missing in
action," he said. 
    The United States and China, the world's two biggest
economies, are just a day away from signing a Phase 1 trade
agreement. 
    China has pledged to buy almost $80 billion of additional
manufactured goods from the United States over the next two
years as part of a trade war truce, a source told Reuters, a
target that could provide a much-needed boost for planemaker
Boeing Co but is being questioned by U.S. trade
experts.
     U.S. stocks touched record highs on Tuesday, as
stronger-than-expected earnings from JPMorgan and
Citigroup added to optimism about the domestic economy.

    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was down less
than a basis point at 1.5781% in afternoon trading. Investors
expect little change in the Fed's long-term strategy, said Lou
Brien, market strategist for DRW Trading.
    "The data was muted, and muted data at this stage of the
game means the Fed will be on the sidelines for an extended
period," he said.
    
    January 14 Tuesday 2:47PM New York / 1947 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.54         1.5719    0.008
 Six-month bills               1.5325       1.5703    -0.003
 Two-year note                 100-23/256   1.5781    -0.008
 Three-year note               99-190/256   1.5883    -0.014
 Five-year note                100-148/256  1.6281    -0.023
 Seven-year note               100-16/256   1.7404    -0.027
 10-year note                  99-92/256    1.8214    -0.027
 30-year bond                  102          2.2821    -0.025
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         5.75         0.00    
 spread                                               
 U.S. 3-year dollar swap         2.00         0.00    
 spread                                               
 U.S. 5-year dollar swap        -0.25         0.50    
 spread                                               
 U.S. 10-year dollar swap       -4.75         0.75    
 spread                                               
 U.S. 30-year dollar swap      -31.50         1.00    
 spread                                               
 

    
    

 (Reporting by Ross Kerber in Boston
Editing by Nick Macfie and Matthew Lewis)
  
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