Yields inch higher in range-bound trading
By Karen Pierog CHICAGO, June 29 (Reuters) - U.S. Treasury yields edged higher on Tuesday in range-bound trading as the market focused on the release later this week of the U.S. employment report for June and how it might affect the Federal Reserve's monetary policy stance. The benchmark 10-year yield was last up less than a basis point at 1.4816%. It notched its largest weekly gain since March last week, but has remained below 1.6% since early June. "We're sitting in a little bit of consolidation range on a technical level," said Ellis Phifer, managing director in fixed income research at Raymond James, adding that the market was in "the calm before the potential storm" that the closely watched nonfarm payrolls report due out Friday could bring. Bill Merz, chief fixed income strategist at U.S. Bank Wealth Management, said there were many unknowns concerning the speed and magnitude of the Fed's easing of the accommodative policies that were put in place last year to aid the coronavirus-battered economy. "The bottom line is that we're all macro investors now and the macro picture is cloudy," he said, adding that there are concerns about how much tightening the economy can sustain even as the flood of stimulus continues. Merz said while the June employment report could move Treasuries, a clearer picture of the jobs market will emerge in the coming months when enhanced unemployment benefits end and students head back to classrooms, freeing parents to return to work. Richmond Fed President Thomas Barkin said on Tuesday that he would be ready to start tapering the central bank's $120 billion in monthly asset purchases as soon as "substantial further progress" on employment has been met. The two-year Treasury yield was last unchanged at 0.2563%. A closely watched part of the yield curve that measures the gap between yields on two- and 10-year Treasury notes was last less than a basis point steeper at 122.56 basis points. June 29 Tuesday 10:17AM New York / 1417 GMT Price Current Net Yield % Change (bps) Three-month bills 0.05 0.0507 -0.002 Six-month bills 0.0575 0.0583 0.000 Two-year note 99-189/256 0.2563 0.000 Three-year note 99-96/256 0.4629 0.003 Five-year note 99-228/256 0.8974 0.003 Seven-year note 100 1.25 0.006 10-year note 101-80/256 1.4816 0.004 20-year bond 103-132/256 2.034 0.003 30-year bond 106-24/256 2.0993 0.001 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.50 0.00 spread U.S. 3-year dollar swap 10.75 0.25 spread U.S. 5-year dollar swap 6.75 0.00 spread U.S. 10-year dollar swap -3.00 0.50 spread U.S. 30-year dollar swap -31.25 0.75 spread (By Karen Pierog Editing by Paul Simao)
