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TREASURIES- Yields in narrow range despite jobs data

Ross Kerber
·3-min read

By Ross Kerber April 22 (Reuters) - U.S. Treasury trading showed little drama for a fifth consecutive day on Thursday despite healthy new employment data as investors awaited guidance from a Federal Reserve meeting next week. The benchmark 10-year yield was up less than a basis point in morning trading at 1.5697%, within the range between 1.528% and 1.633% it has held since last week. Fewer Americans filed new claims for unemployment benefits last week, U.S. Labor Department data showed, suggesting layoffs were subsiding and strengthening expectations for another month of blockbuster job growth in April as a re-opening economy unleashes pent-up demand. But the upbeat report had little impact on the overall Treasury market after it was released Thursday morning. Jim Vogel, FHN Financial interest rate strategist, said the dynamic reflected investors' focus on trading specific maturities rather than making bets about trends across the whole yield curve while waiting for guidance from the Fed. The U.S. central bank's Federal Open Market Committee will meet April 27-28, although it is not expected to make meaningful adjustments to policy. "It's more dangerous to express macro views across the bond market, when each spot trades in its own place. It's not a unified market," Vogel said. The European Central Bank left policy unchanged as expected on Thursday, keeping copious stimulus flowing even as it faces questions over how it might claw back support once the pandemic-stricken euro zone economy reopens. U.S. President Joe Biden's administration on Thursday pledged to slash U.S. greenhouse gas emissions by 50%-52% from 2005 levels by 2030, a target it hopes will spur other big emitter countries to raise their ambition to combat climate change. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 141 basis points, about a basis point higher than its close on Wednesday. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up less than a basis point at 0.1533% April 22 Thursday 9:11AM New York / 1311 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0225 0.0228 0.000 Six-month bills 0.035 0.0355 -0.002 Two-year note 99-242/256 0.1533 0.004 Three-year note 100-36/256 0.3275 0.007 Five-year note 99-176/256 0.8147 0.015 Seven-year note 100-2/256 1.2488 0.011 10-year note 95-248/256 1.5697 0.006 20-year bond 95-176/256 2.1432 -0.006 30-year bond 91-180/256 2.2589 -0.004 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 11.75 0.00 spread U.S. 3-year dollar swap 13.00 -0.25 spread U.S. 5-year dollar swap 8.75 0.00 spread U.S. 10-year dollar swap -1.00 0.00 spread U.S. 30-year dollar swap -27.00 0.00 spread (Reporting by Ross Kerber in Boston; editing by Barbara Lewis)