U.S. yields rise on data, report on Trump, Warsh meeting

Reuters




By Richard Leong

NEW YORK, Sept 29 (Reuters) – Most U.S. Treasury yields edged higher on Friday on encouraging data about steady economic growth and reports U.S. President Donald Trump met with former Federal Reserve Governor Kevin Warsh about a potential nomination to head the U.S. central bank.

In light of his past stance against expansion of the Fed’s balance sheet, Warsh is seen as more hawkish than current Fed Chair Janet Yellen, analysts said.

Consumer spending nudged up 0.1 percent in August but a gauge of U.S. Midwest factory activity unexpectedly rose in September despite disruptions stemming from hurricanes Harvey and Irma.

Friday’s data didn’t change traders expectations the Fed would raise short-term rates in December.

Longer-dated yields were supported by a deceleration in a measure of the core rate on personal consumption expenditure, the Fed’s preferred inflation gauge. The annual rise in the core PCE slowed to 1.3 percent in August, the weakest reading since November 2015.

At 11:52 a.m. (1552 GMT), the benchmark 10-year U.S. Treasury note yield was up 1 basis point at 2.316 percent, while the 30-year yield was down 0.9 basis point at 2.859 percent.

The two-year yield was up over 1 basis point at 1.471 percent, not too far from the near nine-year peak it reached this week.

The two-year yield has risen 14 basis points in September; the 10-year yield is up 20 basis points and the 30-year yield more than 13 basis points.

The $14 trillion sector has experienced a choppy quarter. Bond yields fell in July and August on soft economic data and anxiety about tensions between North Korea and the United States over Pyongyang’s nuclear weapons program.

September 29 Friday 11:53AMNew York / 1553 GMT






















Price



152-27/32

0-2/32


125-108/256

-0-32/256



Price

Current Yield %

Net Change (bps)

1.045

1.0622

0.005

1.17

1.1932

0.000

99-208/256

1.4707

0.016

99-90/256

1.6006

0.023

99-210/256

1.9129

0.018

99-216/256

2.1492

0.014

99-108/256

2.3157

0.009

97-204/256

2.8601

-0.008





DOLLAR SWAP SPREADS





Last (bps)

Net Change (bps)


U.S. 2-year dollar swap spread

25.25

0.50


U.S. 3-year dollar swap spread

23.50

0.00


U.S. 5-year dollar swap spread

7.50

0.00


U.S. 10-year dollar swap spread

-4.50

-0.25


U.S. 30-year dollar swap spread

-33.50

-0.25







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