(Updates with market activity, analyst comment)
By Ross Kerber
April 23 (Reuters) - Traders left U.S. Treasury yields in a
narrow range on Friday as they weighed the political prospects
of a new tax plan from President Joe Biden and the direction of
Federal Reserve policy.
The benchmark 10-year yield was up 1.1 basis
point at 1.5666% in afternoon trading, within the 1.528% to
1.646% range it has held since April 15.
After declining in the early part of the session the note's
yield climbed as high as 1.582% before noon after new data
showed U.S. factory activity powered ahead in early April, and
another report showed strong new home sales.
But then it settled as investors waited for more clarity
from Washington, said Andy Richman, managing director for
Sterling Capital Management.
Currently, "nobody wants to make a rapid move," he said.
Stocks rose nearly 1% on Wall Street a day after reports of
a Biden Administration push to raise taxes on capital gains gave
indexes a shakedown. The proposed numbers had been public since
the presidential campaign.
Investors are looking ahead to guidance from a Fed meeting
next week, on Tuesday and Wednesday, although the U.S. central
bank's Federal Open Market Committee is not expected to make
meaningful adjustments to policy.
Treasury auctions of 2-year, 5-year and 7-year notes on
Monday and Tuesday totaling $183 billion will also show the
market's appetite for U.S. debt.
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 141 basis points, about two basis point
higher than Thursday's close.
The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up less than
a basis point at 0.1575%.
April 23 Friday 2:20PM New York / 1820 GMT
Price Current Net
Yield % Change
(bps)
Three-month bills 0.02 0.0203 0.000
Six-month bills 0.0375 0.038 0.000
Two-year note 99-240/256 0.1575 0.007
Three-year note 100-32/256 0.3327 0.013
Five-year note 99-178/256 0.8132 0.011
Seven-year note 100 1.25 0.014
10-year note 96 1.5666 0.011
20-year bond 95-196/256 2.1383 0.007
30-year bond 91-224/256 2.2506 0.010
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 11.75 -0.25
spread
U.S. 3-year dollar swap 13.50 0.00
spread
U.S. 5-year dollar swap 9.50 0.00
spread
U.S. 10-year dollar swap -0.25 0.50
spread
U.S. 30-year dollar swap -26.50 0.25
spread (Reporting by Ross Kerber in Boston; Editing by Kirsten
Donovan)
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