TREASURIES-Yields hold near historic lows on economic slowdown fears

    By Karen Brettell
    NEW YORK, Aug 10 (Reuters) - U.S. Treasury yields dipped
slightly on Monday and held near historic lows as an increase in
COVID-19 infections raises the prospect of new economic
weakness, even as the United States government plans new
stimulus.
    Five-year yields last week fell to their lowest on record
and benchmark 10-year yields dipped to their lowest since March,
as concerns about growth increased demand for the safe haven
debt.
    “There is a growing recognition that the recovery has
stalled,” said Jon Hill, an interest rate strategist at BMO
Capital Markets in New York. “The question is, is that stall
going to turn into more of a pause, or a more ominous
retrenchment.”
    The United States set a record for coronavirus cases on
Saturday, with more than 5 million people now infected,
according to a Reuters tally.
    U.S. House Speaker Nancy Pelosi and Treasury Secretary
Steven Mnuchin on Sunday said they were open to restarting
COVID-19 aid talks, after weeks of failed negotiations prompted
President Donald Trump to take executive actions.
    Some of the measures, which are aimed at unemployment
benefits, evictions, student loans and payroll taxes, were
likely to face legal challenges as the U.S. Constitution gives
Congress authority over federal spending.

    Benchmark 10-year note yields fell less than a
basis point to 0.556%. They dipped as low as 0.504% on Thursday,
which was the lowest on record with the exception of March 9,
when the yields fell by an extraordinary 30 basis points in one
day.
    The yield curve between two-year and 10-year notes
 flattened by less than a basis point to 43 basis
points.
    The Treasury Department will this week sell record amounts
of three, 10 and 30-year debt, as it finances new spending meant
to blunt the economic impact of the coronavirus.
    The Treasury said last week that it will continue to shift
more of its funding to longer-dated debt in coming quarters.

    
      August 10 Monday 9:43AM New York / 1343 GMT
                               Price                  
 US T BONDS SEP0               181-23/32    0-4/32    
 10YR TNotes SEP0              140-16/256   0-28/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.0975       0.0991    0.000
 Six-month bills               0.12         0.1217    0.005
 Two-year note                 100-2/256    0.121     -0.006
 Three-year note               99-250/256   0.133     -0.005
 Five-year note                100-42/256   0.2168    -0.012
 Seven-year note               99-220/256   0.3955    -0.012
 10-year note                  100-168/256  0.5558    -0.006
 20-year bond                  102-56/256   1.0009    -0.002
 30-year bond                  100-128/256  1.2299    0.001
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         8.75         0.75    
 spread                                               
 U.S. 3-year dollar swap         8.00         0.75    
 spread                                               
 U.S. 5-year dollar swap         6.50         0.50    
 spread                                               
 U.S. 10-year dollar swap        1.25         0.25    
 spread                                               
 U.S. 30-year dollar swap      -38.75        -0.25    
 spread                                               
                                                      
 


  

Source: Read Full Article