CHICAGO, Aug 21 (Reuters) - U.S. Treasury yields inched
higher on Friday after data showed an uptick in business
activity despite the country's still-high number of new COVID-19
cases.
The benchmark 10-year yield, was last up less
than a basis point at 0.6525%.
Data firm IHS Markit reported that its flash U.S. Composite
PMI Index rose to a reading of 54.7 this month - the highest
since February 2019 - from 50.3 in July. Its flash - or
preliminary - indicator for the manufacturing sector stood at
its highest since January 2019 and for the services sector it
was the highest since March 2019.
"The PMI (data) definitely played a part in this but it's a
thin Friday trade so that should be taken into account," said
Justin Lederer, an interest rate strategist at Cantor Fitzgerald
in New York.
Robert Tipp, chief investment strategist at PGIM Fixed
Income in Newark, New Jersey, said the market was looking for
signs of economic deceleration.
"One thing that's out there as another potential positive
driver of Treasuries is if we get instead of a V (shaped)
recovery in the economy we get more of a W," he said.
Meanwhile, the barrage of Treasury supply will continue next
week with $50 billion of two-year notes on Tuesday, $51 billion
of five-year notes on Wednesday, and $47 billion of seven-year
notes on Thursday.
A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, which is viewed as an indicator of
economic expectations, was last at 50.80 basis points, less than
basis points higher than at Thursday's close.
August 21 Friday 10:17AM New York / 1517 GMT
Price Current Net
Yield % Change
(bps)
Three-month bills 0.095 0.0963 0.000
Six-month bills 0.1175 0.1192 0.000
Two-year note 99-246/256 0.1452 0.004
Three-year note 99-224/256 0.1671 0.005
Five-year note 99-224/256 0.2755 0.007
Seven-year note 99-104/256 0.4621 0.009
10-year note 99-188/256 0.6525 0.008
20-year bond 99-116/256 1.1558 0.005
30-year bond 99-236/256 1.3782 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 6.75 0.25
spread
U.S. 5-year dollar swap 5.00 0.50
spread
U.S. 10-year dollar swap -0.25 1.00
spread
U.S. 30-year dollar swap -39.25 1.00
spread
(By Karen Pierog
Editing by Chizu Nomiyama)
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