US Markets

TREASURIES-Yields inch lower as new supply looms

Credit: REUTERS/DADO RUVIC

U.S. Treasury yields dipped on Monday in range-bound trading as stocks opened mixed and the market awaited the latest burst of supply.

By Karen Pierog

CHICAGO, July 20 (Reuters) - U.S. Treasury yields dipped on Monday in range-bound trading as stocks opened mixed and the market awaited the latest burst of supply.

The benchmark 10-year US10YT=RR yield was last down 2.3 basis points at 0.6053%.

Bill Merz, head of fixed income research at U.S. Bank Wealth Management in Minneapolis, said while yields were trending lower, they remain range bound as a new round of debt supply looms.

The Treasury Department will sell $17 billion of 20-year bonds on Wednesday and $14 billion of 10-year Treasury-Inflation Protected Securities (TIPS) on Thursday.

"The amount of net issuance earlier this year was just astounding and we made it through with minimal disruption and minimal volatility in Treasury yields when that issuance was picking up," Merz said. "That gives us confidence that what we're likely to see here in the next couple of months in terms of issuance is not going to be a major event for the market."

Also this week, a new round of stimulus payments to prop up the sagging economy will be the focus in the U.S. Congress.

Risk appetite has seesawed as investors weigh a rise in the number of U.S. cases, deaths, hospitalizations and positivity rates of test results against promising developments on the vaccine front.

The two-year US2YT=RR U.S. Treasury yield, which typically moves in step with interest rate expectations, was down less than a basis point at 0.1431%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=TWEB, which is viewed as an indicator of economic expectations, was at 46 basis points, about 1.6 basis points lower than at Friday's close.

July 20 Monday 9:23AM New York / 1423 GMT

US T BONDS SEP0

180-12/32

0-21/32

10YR TNotes SEP0

139-136/256

0-44/256

Price

Current Yield %

Net Change (bps)

Three-month bills US3MT=RR

0.1125

0.1141

-0.003

Six-month bills US6MT=RR

0.13

0.1319

0.000

Two-year note US2YT=RR

99-247/256

0.1431

-0.004

Three-year note US3YT=RR

99-222/256

0.1696

-0.005

Five-year note US5YT=RR

99-232/256

0.2691

-0.013

Seven-year note US7YT=RR

100-88/256

0.4496

-0.018

10-year note US10YT=RR

100-48/256

0.6053

-0.023

20-year bond US20YT=RR

100-216/256

1.0776

-0.027

30-year bond US30YT=RR

98-176/256

1.3032

-0.026

DOLLAR SWAP SPREADS

Last (bps)

Net Change (bps)

U.S. 2-year dollar swap spread

7.25

-0.25

U.S. 3-year dollar swap spread

5.25

-0.25

U.S. 5-year dollar swap spread

3.75

0.00

U.S. 10-year dollar swap spread

-2.00

-0.25

U.S. 30-year dollar swap spread

-46.25

-0.50

(Reporting by Karen Pierog in Chicago; editing by Jonathan Oatis)

((karen.pierog@thomsonreuters.com; +1 312 408 8647; Reuters Messaging: karen.pierog.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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