U.S. Treasury yields fall as COVID - 19 virus stalling

7
2 minutes

Investors worry public health gains on virus stalling analyst Powell says U.S. economy to see little higher inflation in 2021 U.S. 2 10 yield curve slightly thinner on the day U.S. overnight repo rate drops by Ross Kerber April 20- Most U.S. Treasury yields fell on Tuesday as investors sought to recover from the COVID-19 pandemic. The benchmark 10 year yield was down 3.7 basis points at 1.562% in the early afternoon trading after spending much of the morning near 1.6%. Yields fell as the S& P 500 and the Dow traded lower for a second straight day, with investors pinning their hopes on results from Netflix Inc and other major tech companies this week to help sustain an upbeat start to the earnings season. The economist Brian Bethune said the lower yields stood in contrast with their level of 1.8% on March 30, reflecting fears that public health gains against coronavirus have stalled in Brazil, Canada and other countries. There's a remark on what the world environment will look like, even though the U.S. economic recovery looks strong, Bethune said. The benchmark yield remained below its multi-week low of 1.528% on April 15. Investors will watch the results of a$ 24 billion auction of 20 year bonds by the U.S. Treasury on Wednesday. The Federal Reserve Chair Jerome Powell said the U.S. economy will see a little higher inflation this year as activity increases and supply constraints push up prices in some sectors, but the Fed is committed to keep any overshoot within limits, according to an April 8 letter seen by Reuters. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two and 10 year Treasury notes, which are seen as indicators of economic expectations, was at 140.80 basis points, about 1 basis point lower than Monday's close. The two-year Treasury yield was down at 0.153% to less than a basis point. The repo rate in the market for repurchases fell on Tuesday to 0.1% from 0.3% during the previous session, weighed down by the influx of cash from Government State companies Fannie Mae, Ginnie Mae and Freddie Mac. Around the 18th, Fannie, Freddie and Ginnie invest cash in the repo market during the period when they make mortgage payments to homeowners until they receive their principal and interest payments on the 24th to the mortgage-backed security holder. Tuesday 19 April 1917 GMT Price Current Net Yield Change Three-month bills 0.025 0.0253 -- 0.003 Six-month notes 0.0431 0.000 Two-year note 99- 241 256 0.7984 -- 0.019 Five-year note 95 -- 140 256 2.1521 -- 0.035 20-year bond$ 19.50 -- 0.037 DOLLAR SWAP SPREADS Last Net Change U.S. 3-year dollar swap 12.25 -- 0.027 Spread U.S. 10-year

  • Comments
Loading comments...