CASH – US Yields Fall After Two Day Rise With Ongoing Auctions

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NEW YORK, Sept. 8 (Reuters) – Yields on longer-dated U.S. government bonds fell on Wednesday after rising two days after labor market data and ahead of a Treasury auction of 10-dollar bills years. Yields had risen following Friday’s government wage report, which missed expectations, but underlying metrics such as wage growth were strong enough and investors felt the report was unlikely to fall. get the US Federal Reserve off track to start cutting its bond purchases within a year. to finish. Labor market data released Wednesday showed US job openings reached 10.934 million in July, from a revised 10.185 million the previous month. “What is really going on here at all levels is a reassessment of the environment, a reassessment of the inflation environment, a reassessment of where we are entering a stagflation environment is really the concern. that investors are going to get, “said Steven Ricchiuto, chief US economist at Mizuho Securities USA LLC in New York City. “Here you have a little proof of rising dropouts, you have a little proof that employment is not increasing that much, so you are in an environment where you start to wonder if the labor market is reaching or not. full employment at higher unemployment levels than it did in previous business cycles. ” The yield on 10-year Treasury bills fell 1.6 basis points to 1.355%. A $ 38 billion auction is expected at 1 p.m. ET (6 p.m. GMT) The yield on 30-year Treasuries fell 1.9 basis points to 1.966%. The Treasury will also offer $ 24 billion in 30-year bonds on Thursday. Wells Fargo analysts note that 10-year and 30-year yields have tended to move lower on 30-year auction days over the past year. Debate in Congress is expected to intensify in the coming weeks over the issue of the debt ceiling with the Treasury, which is expected to run out of money in October. Without extension of Treasury borrowing limits, the risk of technical default will weigh on short-term debt. An 8-week $ 30 billion auction, also on Thursday, is more likely to reflect the risk the market sees around the possible expiration of the US debt ceiling. US Treasury Secretary Janet Yellen on Wednesday again urged Congress to tackle the limit on US government borrowing, saying that “the most likely outcome is that liquidity and extraordinary measures will be depleted over the course of of the month of October “. A closely watched portion of the U.S. Treasury yield curve measuring the spread between two-year and ten-year Treasury bill yields, seen as an indicator of economic expectations, was at 113.5 basis points after steepening to a nearly two-month high of 116.4 on Tuesday. The two-year US Treasury yield, which typically moves with interest rate expectations, fell 0.4 basis points to 0.218%. September 8 Wednesday 10:27 a.m. New York / 1427 GMT Price Current net yield% Change (bp) Three-month notes 0.045 0.0456 0.000 Six-month notes 0.0525 0.0532 0.002 Two-year note 99-209 / 256 0.2182 -0.004 Three-year note 99-202 / 256 0.4458 -0.007 Five-year bond 99-174 / 256 0.8158 -0.005 Seven-year bond 100 1.125 -0.013 10-year bond 99-8 / 256 1.3545 -0.016 20-year bond 97-176 / 256 1.8897 -0.017 30-year bond 100-196 / 256 1.966 -0.019 SPREADS SWAP DOLLAR Last (bps) Net change (bps) 2-year US dollar swap 9.00 Spread 0, 50 3-year US dollar swap 10.00 -1.75 spread 5-year US dollar swap 8.75 0.25 spread 10-year US dollar swap 1.50 0.00 spread 30-year US dollar swap -26.50 spread 0.50 (Report by Chuck Mikolajczak Edited by Nick Zieminski)

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