TREASURIES-Yields rise as corp supply calendar grows

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 (Recasts with yield increases, adds quotes, data, updates
prices)
    By Karen Brettell
    NEW YORK, Nov 15 (Businesshala) - Benchmark U.S. Treasury yields
rose to three-week highs on Monday as companies rushed to sell
debt before liquidity likely worsens during the holiday season
and ahead of a U.S. government sale of new 20-year bonds on
Wednesday.
    Investment grade borrowers across multiple sectors tapped
the debt market on Monday, with activity expected to slow next
week, when markets will close on Thursday for Thanksgiving.

    "We probably only have three or four weeks left of new issue
corporate supply (before year-end) so this could be a big week
for credit, and if it is we could start to see a backup in
rates," said Tom di Galoma, a managing director at Seaport
Global Holdings in New York.
    The Treasury is also due to sell $23 billion of 20-year
bonds on Wednesday, which may see tepid demand following a weak
$25 billion sale of 30-year bonds last week.
    Twenty-year bond yields have traded above those offered on
30-year bonds since Oct. 28, with the tenor
suffering from relatively low demand compared with other
maturities.
    Guy LeBas, chief fixed income strategist at Janney
Montgomery Scott, said the lack of a liquid 20-year futures
contract makes it harder to hedge the bonds and in turn may
reduce the willingness of banks to intermediate the trades,
which results in their having wider bid and ask spreads.
    The Treasury said earlier this month that it would cut
issuance of seven- and 20-year maturities faster than other
issues in the coming quarter to address structural imbalances in
supply and demand at these tenors.
    The 20-year bond yields rose 5 basis points to
2.04% while 30-year bond yields increased 5 basis
pojnts to 2.01%.
    Benchmark 10-year yields gained 4 basis points
to 1.62% and are up from a one-month low of 1.42% last Tuesday.
    Yields surged last week after data showed that U.S. consumer
prices posted their biggest gain in 31 years in October, though
the benchmark notes remain below five-month peaks reached in
mid-October.
    The next major U.S. economic release will be retail sales
data on Tuesday. The New York Fed’s Empire State manufacturing
business conditions index on Monday showed improving conditions
in November.
    Several Fed officials are also due to speak this week and
will be watched to see if they express any new concerns that
rising price pressures are becoming entrenched.
    These speakers include Richmond Fed President Thomas Barkin,
Atlanta Fed President Raphael Bostic, San Francisco Fed
President Mary Daly, New York Fed President John Williams and
Chicago Fed President Charles Evans.
   November 15 Monday 3:00PM New York / 2000 GMT
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.0475       0.0482    -0.005
 Six-month bills               0.0625       0.0634    -0.003
 Two-year note                 99-182/256   0.5238    0.002
 Three-year note               99-166/256   0.8691    0.013
 Five-year note                99-94/256    1.2571    0.018
 Seven-year note               99-32/256    1.5079    0.033
 10-year note                  97-184/256   1.6231    0.039
 20-year bond                  95-68/256    2.0425    0.048
 30-year bond                  97-8/256     2.0072    0.052
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        23.75        -0.50    
 spread                                               
 U.S. 3-year dollar swap        19.25        -1.00    
 spread                                               
 U.S. 5-year dollar swap         9.25        -0.25    
 spread                                               
 U.S. 10-year dollar swap        4.50        -1.00    
 spread                                               
 U.S. 30-year dollar swap      -19.50        -1.75    
 spread (Reporting by Karen Brettell; Editing by Andrea Ricci and Hugh
Lawson)
  
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