U.S. Markets closed

TREASURIES-Longer-term yields rise amid month-end rebalancing trades

Karen Pierog

(Recasts, updates yields, adds analyst comments) By Karen Pierog CHICAGO, June 30 (Reuters) - U.S. Treasury yields on the longer rose on Tuesday as month-end rebalancing injected a touch of volatility into the market. The benchmark 10-year yield was last up 1.7 basis points at 0.6528%, while the yield on the five-year note, which hit a record low of 0.266% earlier in the session, was last up less than a basis point at 0.2862%. Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York, said the volatility may be due to some month-end rebalancing trades. He noted that overall trading volume was "very, very light" and added that the market seemed range bound. Meanwhile, investors were fixated on spikes in U.S. coronavirus cases and what those mean for an economic rebound. Collin Martin, fixed income strategist at Schwab Center for Financial Research in New York, said a surge in virus cases in parts of the United States was overshadowing economic data. "It's not that we're not looking at the numbers anymore. But if we're getting data from May and early June, they might not matter as much if we're seeing cases rise," he said. "That seems to be the reason why we're seeing 10-year yields drop lately. They're back to pretty much the low end of their coronavirus trading range," he added. Coronavirus cases more than doubled in at least 10 U.S. states, including Florida and Texas, this month, according to a Reuters analysis. In testimony before the U.S. House of Representatives Financial Services Committee, Federal Reserve Chair Jerome Powell said the economy's path is highly uncertain and gave updates on various programs the Fed put in place to combat the economic fallout from the virus.. 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 at 49.90 basis points, 2.8 basis points higher than at Monday's close. June 30 Tuesday 2:19PM New York / 1919 GMT Price Current Net Yield % Change (bps) Three-month bills 0.145 0.1471 -0.003 Six-month bills 0.1625 0.1653 -0.005 Two-year note 99-243/256 0.1505 -0.009 Three-year note 100-58/256 0.1731 0.000 Five-year note 99-210/256 0.2862 0.005 Seven-year note 100-24/256 0.4863 0.013 10-year note 99-188/256 0.6528 0.017 20-year bond 99-24/256 1.1763 0.019 30-year bond 96-16/256 1.412 0.022 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.25 0.50 spread U.S. 3-year dollar swap 5.75 0.00 spread U.S. 5-year dollar swap 3.50 0.00 spread U.S. 10-year dollar swap -2.00 0.25 spread U.S. 30-year dollar swap -49.50 0.50 spread (Reporting by Karen Pierog; Editing by Sandra Maler and Cynthia Osterman)