U.S. yields dip with eyes on inflation data
NEW YORK, Sept 13 (Reuters) - U.S. government bond yields dipped on Monday with markets looking ahead to consumer inflation data on Tuesday that is expected to show a continuing slowdown in the pace of price increases. Yields are seen remaining in a tight range after last week's 10- and 30-year auctions were met with strong demand. "It will likely take downside surprises for CPI and retail sales to register in the bond market in the next five days," said Jim Vogel, head of fixed income strategy and commentary at FHN Financial Capital Markets, in a client note. The core reading of the U.S. consumer price index is expected to show a rise of 0.3% in August, down from 0.5% the previous month and 0.9% in June. "The numbers are important to the run up to the fourth quarter, but they are not pivotal by themselves. Any weakness will be explained away by the (COVID-19) Delta wave," Vogel said. Shortages of basic materials and parts have created bottlenecks, and price increases, across various supply chains. The U.S. Federal Reserve is paying close attention to price pressures as it mulls when to begin to reduce its massive bond holdings and how soon to begin lifting rates from near zero. It also remains on the lookout for any signs that price pressures may broaden. There are no scheduled Federal Reserve speakers this week ahead of next week's FOMC meeting. The yield on 10-year Treasury notes was down 2 basis points to 1.321%. The yield on the 30-year Treasury bond was down 2.7 basis points to 1.907%. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 0.4 basis point at 0.213%. September 13 Monday 10:31 AM New York / 1431 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0475 0.0482 0.000 Six-month bills 0.05 0.0507 0.000 Two-year note 99-213/256 0.2109 -0.006 Three-year note 99-208/256 0.438 -0.010 Five-year note 99-198/256 0.7967 -0.019 Seven-year note 100-44/256 1.0993 -0.021 10-year note 99-92/256 1.3191 -0.022 20-year bond 98-156/256 1.8336 -0.026 30-year bond 102-44/256 1.9044 -0.030 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 10.00 0.00 spread U.S. 3-year dollar swap 11.25 0.25 spread U.S. 5-year dollar swap 9.50 0.00 spread U.S. 10-year dollar swap 2.00 -0.75 spread U.S. 30-year dollar swap -26.00 -0.25 spread (Reporting by Rodrigo Campos; Editing by Steve Orlofsky)
