CHICAGO, April 14 (Reuters) - U.S. Treasury yields rose on
Wednesday as several Federal Reserve officials, including Chair
Jerome Powell, were set to speak in the wake of the latest
inflation data.
The benchmark 10-year yield was last up 1.5
basis points at 1.6376%.
Yields tumbled on Tuesday after a strong auction of 30-year
bonds and U.S. consumer prices data that showed while underlying
inflation picked up in March, it was not rising wildly as the
economy recovered from the coronavirus pandemic.
"It's more likely yields drift higher from here, and the
reason is we're just getting a lot of positive global economic
data," said Kathy Jones, chief fixed income strategist at the
Schwab Center for Financial Research in New York.
"Although yields have moved up a lot, really 1.60% on the
10-year is not all that high when you think about the global
economy reflating and growing."
As for the Fed speakers, she said they will continue to
insist the inflation numbers are transitory, but "will have to
reconcile the better-than expected economic data with their
projections for staying on hold".
Dallas Federal Reserve Bank President Robert Kaplan said on
Wednesday that the central bank should reduce its "extraordinary
measures... at the first opportunity once we've reached, and are
reaching, some of these benchmarks".
Those include the weathering of the pandemic and progress
toward full employment and 2% inflation.
Later on Wednesday, the Fed will release its Beige Book, a
compendium of data and anecdotes gathered by each of the 12
regional Federal Reserve banks on current economic conditions,
based on surveys of and interviews with key business contacts.
Jones said the market will be looking at how serious and
widespread are price pressures for companies in various areas,
and what they may be saying about employment and wage prospects.
The two-year Treasury yield, which typically
moves in step with interest rate expectations, was last less
than a basis point higher at 0.1649%.
A closely watched part of the yield curve that measures the
gap between yields on two- and 10-year Treasury notes
was last 1.74 basis points steeper at 147.45 basis
points.
April 14 Wednesday 9:49AM New York / 1349 GMT
Price Current Net
Yield % Change
(bps)
Three-month bills 0.02 0.0203 0.000
Six-month bills 0.04 0.0406 0.000
Two-year note 99-236/256 0.1649 0.004
Three-year note 100-10/256 0.3619 0.011
Five-year note 99-114/256 0.8645 0.025
Seven-year note 99-156/256 1.3089 0.021
10-year note 95-92/256 1.6376 0.015
20-year bond 94-148/256 2.2141 0.019
30-year bond 90-164/256 2.3108 0.003
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 11.50 0.00
spread
U.S. 3-year dollar swap 12.00 0.25
spread
U.S. 5-year dollar swap 9.00 -0.50
spread
U.S. 10-year dollar swap -0.75 -1.50
spread
U.S. 30-year dollar swap -25.75 -1.75
spread (By Karen Pierog; Editing by Jan Harvey)
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