TREASURIES-U.S. yield curve flattest in 11 years as bond prices rise
* Treasuries continue narrow trading range * Bid for European government bonds helps support U.S. debt By James Thorne NEW YORK, July 13 (Reuters) - The yield curve on U.S. Treasuries once again reached its flattest level in 11 years on Friday in low-volume trading.
The spread between 2-year and 10-year Treasury notes fell to 24.46 basis points, continuing a persistent downward trend since early June.
"Every day it's another basis point tighter in 2s to 10s. I can't recall a time where it's really just been so day in and day out consistent in that trading theme," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia.
Treasury prices rose in unison on Friday. The yield on benchmark U.S. 10-year notes was 2 basis points lower at 2.832 percent.
Rising bond prices in Europe helped to support Treasury demand, analysts said. The safe-haven bid appeared to be spurred by U.S. President Trump's criticism of UK Prime Minister Theresa May's Brexit strategy, saying it killed hopes of a U.S. trade deal.
"The most important thing we're seeing here is a long-term very narrow range trade," said John Canavan, market strategist at Stone & McCarthy Research Associates in New York.
U.S. 10-year notes have traded between 2.807 and 2.884 percent during the past two weeks, which Canavan said was a "very narrow range." Markets were looking forward to upcoming commentary from the Federal Reserve. Fed Chairman Jerome Powell will give his semiannual testimony on the economy and monetary policy before the Senate Banking Committee next Tuesday.
The Fed's Bank of Atlanta President Raphael Bostic will speak on Friday at 12:30 p.m. (1630 GMT) before the Northern Chapter Virginia Society of Certified Public Accountants.
July 13 Friday 10:47AM New York / 1447 GMT Price US T BONDS SEP8 145-22/32 13/32 10YR TNotes SEP8 120-88/256 6/32 Price Current Net Yield % Change (bps) Three-month bills 1.9375 1.9737 0.000 Six-month bills 2.1125 2.1644 -0.001 Two-year note 99-216/256 2.582 -0.012 Three-year note 99-228/256 2.6632 -0.022 Five-year note 99-130/256 2.7317 -0.023 Seven-year note 99-176/256 2.7996 -0.022 10-year note 100-92/256 2.8326 -0.020 30-year bond 103-200/256 2.9338 -0.016 YIELD CURVE Last (bps) Net Change (bps) 10-year vs 2-year yield 24.90 -0.70 30-year vs 5-year yield 20.10 0.40 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 22.50 -0.75 spread U.S. 3-year dollar swap 19.50 0.00 spread U.S. 5-year dollar swap 13.75 0.00 spread U.S. 10-year dollar swap 6.25 -0.50 spread U.S. 30-year dollar swap -4.00 -0.50 spread (Reporting by James Thorne; editing by Jonathan Oatis)
