US Markets

Yield rise as COVID vaccine hopes boost risk appetite

Credit: REUTERS/DADO RUVIC

U.S. Treasury yields rose and the yield curve steepened on Wednesday as hopes of a COVID-19 vaccine boosted risk appetite and reduced demand for safe-haven bonds. Benchmark 10-year notes rose three basis points to 0.648%.

By Karen Brettell

NEW YORK, July 15 (Reuters) - U.S. Treasury yields rose and the yield curve steepened on Wednesday as hopes of a COVID-19 vaccine boosted risk appetite and reduced demand for safe-haven bonds.

Moderna Inc's MRNA.O experimental vaccine for COVID-19 showed it was safe and provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study, U.S. researchers reported on Tuesday.

“The market is trading fairly ‘risk on’ on vaccine hopes,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. “It’s largely COVID news driving the price action recently.”

Investors are wary about new economic damage as a sharp rise in COVID infections in many U.S. states leads to new shutdowns aimed at stemming the spread of the virus.

Benchmark 10-year notes US10YT=RR rose three basis points to 0.648%. They have held in a tight range from 0.569% to 0.784% since mid-June.

The yield curve between two-year and 10-year notes US2US10=TWEB steepened two basis points to 48 basis points.

Data on Wednesday showed that U.S. import prices increased more than expected in June amid a surge in the cost of fuel, but the overall trend remained weak, suggesting inflation could stay tame despite a jump in consumer prices last month.

Industrial output also rose 5.4% in June, while a New York manufacturing index jumped more than expected in July.

The next major economic focuses are jobless claims and retail sales on Thursday.

July 15 Wednesday 9:30AM New York / 1330 GMT

Price

US T BONDS SEP0 UScv1

179-10/32

-0-31/32

10YR TNotes SEP0 TYcv1

139-52/256

-0-56/256

Price

Current Yield %

Net Change (bps)

Three-month bills US3MT=RR

0.145

0.1471

0.002

Six-month bills US6MT=RR

0.1475

0.1497

0.003

Two-year note US2YT=RR

99-239/256

0.159

0.004

Three-year note US3YT=RR

99-208/256

0.1878

0.008

Five-year note US5YT=RR

99-192/256

0.3009

0.019

Seven-year note US7YT=RR

100-20/256

0.4886

0.028

10-year note US10YT=RR

99-200/256

0.648

0.034

20-year bond US20YT=RR

100-4/256

1.1241

0.045

30-year bond US30YT=RR

97-164/256

1.3463

0.045

DOLLAR SWAP SPREADS

Last (bps)

Net Change (bps)

U.S. 2-year dollar swap spread

7.00

0.50

U.S. 3-year dollar swap spread

5.00

0.50

U.S. 5-year dollar swap spread

3.50

0.25

U.S. 10-year dollar swap spread

-2.50

0.00

U.S. 30-year dollar swap spread

-47.00

0.00

(Reporting by Karen Brettell; editing by Jonathan Oatis)

((karen.brettell@thomsonreuters.com))

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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