Yields fall despite strong June private payrolls
By Karen Pierog CHICAGO, June 30 (Reuters) - Yields on longer-dated U.S. Treasuries fell on Wednesday to their lowest levels in more than a week after a report showed private payrolls increased solidly in June. The benchmark 10-year yield, which tumbled to its lowest level since June 21 at 1.448%, was last down 2.9 basis points at 1.4511%. The yield on 30-year bonds, which hit a session low of 2.061%, was last at 2.0647%. The ADP National Employment Report showed private payrolls increased by 692,000 jobs last month, topping the 600,000 rise forecast by economists polled by Reuters. Data for May was revised lower to show 886,000 jobs were added instead of the initially reported 978,000. Eased inflation fears are keeping yields from climbing despite the strong jobs data, according to Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research in New York. "You would think a 700,000 nonfarm payroll number would be cause for people to start sending yields up because real yields are so low and even nominal yields relative to the growth rate in the economy that we're looking for are very low," she said. Jones added that the ADP report had the kind of numbers she expects to see in the government's closely-watched June jobs data due out on Friday. The U.S. Labor Department is expected to report that private payrolls along with government hiring increased by 700,000 in June, after rising by 559,000 in May, according to a Reuters poll of economists. The unemployment rate is forecast to have fallen to 5.7%, from 5.8% in May. The two-year Treasury yield was last unchanged at 0.2525%. A closely watched part of the yield curve that measures the gap between yields on two- and 10-year Treasury notes was last 2.38 basis points flatter at 119.69 basis points. June 30 Wednesday 10:10AM New York / 1410 GMT Price Current Net Yield % Change (bps) Three-month bills 0.045 0.0456 -0.005 Six-month bills 0.05 0.0507 -0.005 Two-year note 99-191/256 0.2525 0.000 Three-year note 99-96/256 0.4631 0.000 Five-year note 99-248/256 0.8814 -0.010 Seven-year note 100-48/256 1.222 -0.022 10-year note 101-152/256 1.4511 -0.029 20-year bond 104-40/256 1.9956 -0.034 30-year bond 106-228/256 2.0647 -0.032 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.75 0.00 spread U.S. 3-year dollar swap 10.50 -0.25 spread U.S. 5-year dollar swap 7.25 0.25 spread U.S. 10-year dollar swap -2.75 0.00 spread U.S. 30-year dollar swap -31.00 0.25 spread (Reporting by Karen Pierog, Editing by Nick Zieminski)
