February 14, 2020 / 6:56 PM / 4 days ago

TREASURIES-Yields decline on virus concerns and consumer data

 (Updates with market activity, analyst comment)
    By Ross Kerber
    BOSTON, Feb 14 (Reuters) - U.S. Treasury yields declined on
Friday as investors bought safe-haven government debt ahead of a
long holiday weekend after soft retail sales data and on
continuing caution about the coronavirus epidemic in China.
    The benchmark 10-year yield was down 3.7 basis
points in afternoon trading at 1.5797%.
    Analysts cited concerns about the coronavirus in China and a
report that core U.S. retail sales were unchanged for January.
An issue is the uncertain long-term economic impact of the
epidemic, said Bill Merz, head of fixed income research at U.S.
Bank Wealth Management.
    "The market has really been trading on sentiment lately.
That’s understandable given the general uncertainty around
coronavirus," he said. He added, "We don’t see any edge in
trying to predict the outcome of something like that."
    Traders reduced risk in their portfolios heading into the
weekend, wary of what news might emerge about the virus, similar
to trading on previous Fridays. U.S. markets are closed on
Monday for Presidents Day.
    "Traders are more comfortable going into the weekend" with
less risk, said James Barnes, director of fixed income at Bryn
Mawr Trust. He added that many believe "There's more risk to the
downside than to the upside."   
    U.S. Commerce Department data showed U.S. consumer spending
appeared to have slowed further in January, with sales at
clothing stores declining by the most since 2009, which could
raise concerns about the economy's ability to continue its
moderate expansion.
    Commerce said retail sales excluding automobiles, gasoline,
building materials and food services were unchanged last month,
weaker than the 0.3 percent rise economists had predicted in a
Reuters poll. Data for December was revised down.
    Separately, U.S. industrial production fell 0.3% in January
as unseasonably warm weather held down the output of utilities
and Boeing Co cut production of civilian aircraft, the
Federal Reserve said on Friday.
    In China, the capital city Beijing on Friday imposed a
14-day self-quarantine on people returning to the city from
holidays to prevent the spread of the new coronavirus, as the
country struggles to get its economy going after the annual
Lunar New Year holiday.
    Authorities reported 5,090 new cases in mainland China,
including more than 120 deaths, taking the number of infected to
63,851, and the number of deaths to 1,380.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was  down 2 basis
points at 1.4217% in afternoon trading.
    
      February 14 Friday 1:33PM New York / 1833 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.545        1.5766    -0.010
 Six-month bills               1.515        1.5518    -0.008
 Two-year note                 99-233/256   1.4217    -0.020
 Three-year note               99-246/256   1.3884    -0.030
 Five-year note                99-218/256   1.4061    -0.034
 Seven-year note               100          1.5       -0.038
 10-year note                  99-68/256    1.5797    -0.037
 30-year bond                  99-56/256    2.0349    -0.043
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         2.50        -0.50    
 spread                                               
 U.S. 3-year dollar swap         1.25        -0.25    
 spread                                               
 U.S. 5-year dollar swap        -1.00        -0.75    
 spread                                               
 U.S. 10-year dollar swap       -6.00        -0.75    
 spread                                               
 U.S. 30-year dollar swap      -33.25        -0.50    
 spread                                               
 
    
    

 (Reporting by Ross Kerber; Editing by David Gregorio)
  
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