By Chuck Mikolajczak
Sept 25 (Reuters) – U.S. Treasury yields edged lower on Friday in the wake of an upbeat report on U.S. durable goods, while equities were choppy in early trading, alternating between gains and losses.
The Commerce Department said orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 1.8% in August, above the 0.5% forecast.
The report did little, however, to change views that the economy was stalling in its recovery from coronavirus-induced lockdowns as government support to businesses and the unemployed peters out.
“Overall, it is more trends and it doesn’t feel that data is going to cause some massive volatility in the market the way it did and the way it will in six months,” said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York.
Democrats in the U.S. House of Representatives are working on a $2.2 trillion coronavirus stimulus package that could be voted on next week, a key lawmaker said on Thursday, as House Speaker Nancy Pelosi reiterated that she is ready to negotiate with the White House.
Analysts at Jefferies noted that while the report points to a large capital expenditures contribution to economic growth in the third quarter, sustaining the momentum beyond that “will be difficult.”
The yield on 10-year Treasury notes US10YT=RR was down 0.8 basis point to 0.656%.
Even with the move lower, the yield on the 10-year remained within the 6-basis-point range it has held since the Federal Reserve’s most recent policy statement on Sept. 16.
“Overall the market remains fairly rangebound. There is some intraday, intra-week volatility that when you really look at it, we just don’t go anywhere,” said Lederer.
The two-year US2YT=RR U.S. Treasury yield, which typically moves in step with interest rate expectations US2YT=RR, was down 0.6 basis point to 0.129%.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was at 52.5 basis points, up slightly from a two-week low of 51.2 hit on Monday.
September 25 Friday 11:02AM New York / 1502 GMT
Price
US T BONDS DEC0 UScv1
177-4/32
0-5/32
10YR TNotes DEC0 TYcv1
139-172/256
0-24/256
Price
Current Yield %
Net Change (bps)
Three-month bills US3MT=RR
0.0975
0.0989
0.000
Six-month bills US6MT=RR
0.105
0.1065
-0.002
Two-year note US2YT=RR
99-254/256
0.1289
-0.006
Three-year note US3YT=RR
99-238/256
0.1488
-0.010
Five-year note US5YT=RR
99-240/256
0.2626
-0.012
Seven-year note US7YT=RR
99-126/256
0.4488
-0.013
10-year note US10YT=RR
99-180/256
0.6561
-0.008
20-year bond US20YT=RR
99-24/256
1.1762
-0.007
30-year bond US30YT=RR
99-124/256
1.3961
-0.005
DOLLAR SWAP SPREADS
Last (bps)
Net Change (bps)
U.S. 2-year dollar swap spread
8.75
-0.25
U.S. 3-year dollar swap spread
8.25
0.00
U.S. 5-year dollar swap spread
6.50
0.00
U.S. 10-year dollar swap spread
2.25
0.00
U.S. 30-year dollar swap spread
-34.00
0.00
(Reporting by Chuck Mikolajczak; Editing by Dan Grebler)
(([email protected]; @ChuckMik; Reuters Messaging: [email protected]))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
