U.S. markets closed

TREASURIES-Yields rise as stimulus hopes, retail sales boost risk appetite

Karen Brettell

(Adds Powell comments, updates prices) By Karen Brettell NEW YORK, June 16 (Reuters) - U.S. Treasury yields rose on Tuesday as hopes of further fiscal stimulus boosted risk appetite, and after data showed a record rise in U.S. retail sales in May. Stocks gained on a report that the Trump administration is preparing a nearly $1 trillion infrastructure proposal as part of its push to spur the world's largest economy back to life. Risk sentiment was further uplifted after the Commerce Department said overall retail receipts rose 17.7% last month after falling by a record 14.7% in April, as 2.5 million Americans went back to work and people began moving about more freely. "It was a pretty big blowout relative to expectations," said Tom Simons, a money market economist at Jefferies in New York. "The data prints have been suggestive of a more broad based and more robust recovery (than previously expected) and the market is really focusing on that." Benchmark 10-year note yields gained five basis points to 0.755%. They remain below an 11-week high of 0.959% on June 5, when data showed that employers unexpectedly added jobs in May. The yield curve between two-year and 10-year notes steepened two basis points to 55 basis points. The Federal Reserve also cheered markets on Monday after it said it would begin buying corporate bonds in the secondary market. The U.S. central bank last week signaled it plans years of extraordinary support for the economy, with policymakers projecting the economy to shrink 6.5% in 2020 and the unemployment rate to be 9.3% at year's end. Fed Chair Jerome Powell said on Tuesday that a full U.S. economic recovery will not occur until Americans are sure that the novel coronavirus epidemic has been brought under control. The Treasury will sell $17 billion in 20-year bonds on Wednesday. June 16 Tuesday 3:00PM New York / 1900 GMT Price US T BONDS SEP0 175-23/32 -1-19/32 10YR TNotes SEP0 138-112/256 -0-76/25 6 Price Current Net Yield % Change (bps) Three-month bills 0.17 0.1724 -0.006 Six-month bills 0.185 0.1877 -0.002 Two-year note 99-217/256 0.2032 0.014 Three-year note 100-10/256 0.2369 0.016 Five-year note 99-128/256 0.3519 0.026 Seven-year note 99-136/256 0.5688 0.035 10-year note 98-196/256 0.7545 0.052 20-year bond 96-188/256 1.3119 0.081 30-year bond 93-36/256 1.5369 0.088 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.50 -0.25 spread U.S. 3-year dollar swap 4.50 0.00 spread U.S. 5-year dollar swap 4.50 0.00 spread U.S. 10-year dollar swap -2.00 -0.50 spread U.S. 30-year dollar swap -49.75 -0.75 spread (Reporting by Karen Brettell; editing by Jonathan Oatis and Richard Chang)