RPT-TREASURIES-U.S. 10-year yields dip from six-week highs

(Repeats to additional subscribers without any changes to text) By Matt Tracy WASHINGTON, Feb 13 (Reuters) - Benchmark 10-year U.S. Treasury yields dipped on Monday from a six-week high amid mixed market expectations for the latest inflation data and the Federal Reserve's response. Yields have steadily risen since the release of stronger-than-expected jobs data at the beginning of the month. Employers added 517,000 jobs in January, while the unemployment rate hit 3.4%, its lowest reading in 53 years. Addressing the jobs data last week, Fed Chair Jerome Powell left the door open for raising the federal funds rate beyond the 5.00%-5.25% peak widely forecast prior to the jobs data. Market participants have since recalibrated the odds the Fed pursues tighter monetary policy. Much will depend on forthcoming datapoints, including the Tuesday release of consumer price index data for the month of January. "We're now at a point in the cycle where the Fed is going to be more data-dependent," said Eric Winograd, chief U.S. economist at AllianceBernstein. "And so in between major data releases, you're kind of in a holding pattern," Winograd said. "Markets go up or down a couple basis points, but you're unlikely to see any new trends emerge until you get that next big datapoint." Economists polled by Reuters expect Tuesday's CPI reading to show headline prices and the core CPI gaining 0.5% and 0.4% month-over-month for January, respectively. , However, some on Monday recalibrated their expectations for a slightly lower CPI. "We're looking for core CPI to rise 0.3% (month-over-month), slightly below consensus and in line with the recent pace of core inflation," economists at PIMCO noted. After reaching a high of 3.755%, their highest since Jan. 6, benchmark 10-year note yields have since dipped to 3.718%. Two-year yields , which are particularly sensitive to moves in rates expectations, rose to 4.537%, their highest since late November. The yield curve between two-year and 10-year notes was last inverted minus 81.5 basis points, after inverting as far as minus 88 basis points last week, the most since Dec. 13. The deep inversion on this part of the yield curve indicates concerns about an imminent recession. Following Tuesday's CPI report, the U.S. Census Bureau will release its January retail sales report, another datapoint watched closely by the Fed and market. This is expected to show retail sales rebounding 1.6% in January after falling 1.1% in December, according to a Reuters survey of economists. In addition to domestic datapoints, yields have also risen on increased concerns about inflation after Russian Deputy Prime Minister Alexander Novak said Russia will cut oil production by 500,000 barrels per day. The next major datapoints will come on Feb. 24, when the U.S. Commerce Department releases personal consumption expenditure and income data. February 13 Monday 3:30PM New York / 2030 GMT Price

US T BONDS MAR3 127-12/32

0-14/32

10YR TNotes MAR3 112-200/256

0-24/256

Price Current Net Yield % Change (bps) Three-month bills 4.6575

4.7753 0.002

Six-month bills 4.765

4.9471 0.018

Two-year note 99-60/256

4.5365 0.023

Three-year note 99-98/256

4.2212 0.022

Five-year note 98-24/256

3.9263 0.002

Seven-year note 97-244/256

3.8377 -0.018

10-year note 98-48/256

3.7187 -0.024

30-year bond 97

3.7933 -0.033

DOLLAR SWAP SPREADS

Last (bps) Net

Change

(bps)
U.S. 2-year dollar swap
spread 28.75

-1.00

U.S. 3-year dollar swap
spread 17.25

0.00

U.S. 5-year dollar swap
spread 5.50

1.25

U.S. 10-year dollar swap
spread -1.75

0.50

U.S. 30-year dollar swap
spread -38.25

0.75

(Reporting by Matt Tracy; Editing by Will Dunham)

Reuters

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RPT-TREASURIES-U.S. 10-year yields dip from six-week highs

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