TREASURIES-Short-term yields rise, curve flattens after CPI data

- Advertisement -


    NEW YORK, Oct 13 (Businesshala) - Yields on shorter-term
Treasuries rose on Wednesday, while longer-dated yields
dipped following data on consumer prices that further fanned
rising inflation concerns. 
    The consumer price index rose 0.4% last month after
climbing 0.3% in August, the Labor Department said on
Wednesday. In the 12 months through September, the CPI
increased 5.4% after advancing 5.3% year-on-year in August.

    The yield on the two-year Treasury note, which
typically moves in step with interest rate expectations, was
up 2.2 basis points to 0.370% after reaching a high of
0.394%, its highest since March 24, 2020. 
    The three-year note yield was up 1.8 basis
points to 0.659% after climbing to 0.701%, its highest since
March 5, 2020. 
    But longer-dated yields fell, indicating the market is
still not pricing in a sustained period of inflation, which
served to flatten the yield curve. 
    "Obviously there is enough there for people to continue
the flattening trade and just take intermediate Treasury
yields to fresh highs," said Jim Vogel, interest rate
strategist at FHN Financial in Memphis, Tennessee.  
    "So the inflation story just continues to mount with just
sort of any news people will find reasons to be more
concerned about inflation."
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 118.2 basis points after falling to
118.1, its lowest level in two weeks. The curve had steepened
to a 3-1/2 month high of 129.7 on Friday.
    On Tuesday, three U.S. Federal Reserve policymakers on
Tuesday said the economy has healed enough for the central
bank to begin to withdraw its crisis-era support, cementing
expectations the Fed will start to taper its monthly bond
purchases as soon as next month.  
    The yield on 10-year Treasury notes was down
2.6 basis points to 1.554%. 
    An auction of $24 billion of 30-year bonds is scheduled
for 1 p.m. EDT (1700 GMT) Wednesday. The Treasury auctioned
$58 billion of three-year notes and $38 billion of 10-year
notes on Tuesday. 
    The yield on the 30-year Treasury bond was
down 4.9 basis points to 2.056%. 
    
      October 13 Wednesday 9:52AM New York / 1352 GMT
                               Price                  
 US T BONDS DEC1               159-13/32    0-27/32   
 10YR TNotes DEC1              131-60/256   0-24/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.05         0.0507    -0.002
 Six-month bills               0.0575       0.0583    0.002
 Two-year note                 99-196/256   0.37      0.022
 Three-year note               99-230/256   0.6593    0.018
 Five-year note                99           1.0825    0.008
 Seven-year note               99-40/256    1.3775    -0.010
 10-year note                  97-60/256    1.5542    -0.026
 30-year bond                  98-192/256   2.0562    -0.049
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        12.50         0.50    
 spread                                               
 U.S. 3-year dollar swap        12.50        -2.75    
 spread                                               
 U.S. 5-year dollar swap         7.25        -0.75    
 spread                                               
 U.S. 10-year dollar swap        1.25        -0.50    
 spread                                               
 U.S. 30-year dollar swap      -23.50         0.25    
 spread                                               
 

    

 (Reporting by Chuck Mikolajczak; Editing by Kirsten Donovan)
  
- Advertisement -

- Advertisement -

.

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox