TREASURIES-Yields inch lower as new supply looms
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
10YR TNotes SEP0
Current Yield %
Net Change (bps)
Three-month bills US3MT=RR
Six-month bills US6MT=RR
Two-year note US2YT=RR
Three-year note US3YT=RR
Five-year note US5YT=RR
Seven-year note US7YT=RR
10-year note US10YT=RR
20-year bond US20YT=RR
30-year bond US30YT=RR
DOLLAR SWAP SPREADS
Net Change (bps)
U.S. 2-year dollar swap spread
U.S. 3-year dollar swap spread
U.S. 5-year dollar swap spread
U.S. 10-year dollar swap spread
U.S. 30-year dollar swap spread
(Reporting by Karen Pierog in Chicago; editing by Jonathan Oatis)
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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