Business

TREASURIES recession fears US 30-year return to near record low




      * The United States sells $ 10 billion on $ 10 billion at
* Interest rate cuts by Asian central banks increase bond purchases

(Updates market action, adds quotation, table)
By Richard Leong
NEW YORK, Aug. 7 (Reuters) - U.S. Treasury returns fell
Wednesday, with a 30-year return near record lows, is increasing
fears of a global economic downturn and rates Federal
Reserve needs to pick up the pace of interest rate cuts to
counteracting rising recessions.
A carefully watched US recession, the premium on
three-month Treasury bills over 10-year interest rates
raised to its highest level since March 2007.
Bond yields fell worldwide with German yields
record low in negative territory. It came in the wake of
several Asian central banks that lower the key rate
addresses growth problems arising from the escalating trade war
between China and the United States.
Interest rates in New Zealand, India and Thailand touched a
floods of purchases of longer dated bonds in Asia, which persisted
to European and American trade, analysts said.
"The supply of interest rate cuts from central banks abroad added
fuel for attendance, "said Jonathan Cohn, interest rate strategist
at Credit Suisse in New York.
Huge demand for treasuries is expected to support demand
for $ 27 billion of ten-year government notes for
sale at. ET.
The 1[ads1]0-year note sale is part of this week's $ 84 billion
quarterly repayment expected to raise $ 26.7 billion
cash for new federal spending.
In "when-issued" activity, traders expected the latest
10-year note supply to get a return of 1,637%, which will be one
3-year low on a 10-year auction letter.
In the open market, the return is on 10-year notes
was 10.20 basis points lower at 1.6365%. They had
previously fell to 1.595%, the lowest since October 2016.
The prices of 30-year or long-term bonds were up 3 points
price, and put them on the field for a sixth day of winnings.
Thirty years return was down 12.20 basis points
2.1475% after hitting 2.123% previously, which was far from over
an all-time low of 2.089% set in July 2016, according to
Refinitive data.
Longer-dated government bonds had a combined return of 6.02% above
previous five days, the biggest gain since October 2011,
according to an index compiled by Bloomberg and Barclays.

Interest futures suggested traders build games
The Fed would cut interest rates a further three times by the end of the year
avert a recession.
Investors' fear of a recession was underscored
inversion between three-month bills and 10-year returns, which
expanded to 39 basis points, a level not seen since March 2007.

August 7, Wednesday 11:17 AM New York / 1517 GMT
Price
US T BONDS SEP9 163-9 / 32 73/32
10YR TNotes SEP9 130-116 / 256 22/32
Price Current net
Yield% change
(Bps)
Three-month bills 1.98 2.0176 -0.031
Six-month bills 1.89 1.94 -0.062
Two-year note 100-100 / 256 1.5487 -0.062
Three-year marked 100-14 / 256 1.4813 -0.070
Five-year note 101-88 / 256 1,4691 -0.077
Seven-year note 102-40 / 256 1.5478 -0.084
10-year note 106-164 / 256 1.6365 -0.102
30-year bond 115-240 / 256 2.1475 -0.122
YIELD CURVE Last (bps) Net
change
(Bps)
10-year vs 2-year return 8.60 -2.90
30-year vs 5-year return 67.70 -4.00
DOLLAR Swap SPREADS
Latest (bps) Net
change
(Bps)
U.S. 2-year dollar exchange -2.50 -2.25
spread
U.S. 3-year dollar exchange -5.00 -1.25
spread
U.S. 5-year dollar swap -7.50 -1.75
spread
U.S. 10-year dollar swap -12.00 -1.75
spread
U.S. 30-year dollar swap -40.75 -1.50
spread



(Reporting by Richard Leong; Editing by Bernadette Baum)
Our Standards: Thomson Reuters Trust Principles.



Source link

Back to top button