"People are focusing increasingly week-to-week on the summer and the debt ceiling deadline, and that is increasingly impacting what could be some idiosyncratic moves in the Treasury market," said Fran Rodilosso, head of fixed income ETF portfolio management at VanEck. "There's a growing sense that there's not a lot of common ground this time." U.S. tax collections are currently trending roughly 30% below last year’s level, raising the possibility that the United States will reach its borrowing limit as soon as the first half of June rather than later in the summer, according to Goldman Sachs Global Investment Research. The House of Representatives is expected to vote on a Republican-led debt and spending bill this week.
Market concerns over a debt default pushed the price of insuring Treasury debt through credit-default swaps to their highest levels in over a decade last week.
The yield on 10-year Treasury notes was down 5.2 basis points to 3.520%, while the yield on the 30-year Treasury bond was down 4.7 basis points to 3.731%.
The Chicago Fed National Activity Index slipped 0.19 in March, the same decline it posted in February, and slightly above market expectations for a 0.20 decline. The April reading of the Dallas Fed Manufacturing Index, meanwhile, was -23.4, nearly double the -12.0 economists were predicting and down from -15.7 in March.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, was at -62.9 basis points.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 4.6 basis points at 4.144%.
April 24 Monday 12:54PM New York / 1654 GMT
Price Current Net
Yield % Change
(bps)
Three-month bills 4.9575 5.0866 -0.030
Six-month bills 4.84 5.0406 -0.022
Two-year note 99-129/256 4.1436 -0.046
Three-year note 99-192/256 3.8395 -0.056
Five-year note 100-20/256 3.6071 -0.058
Seven-year note 100-100/256 3.5606 -0.059
10-year note 99-220/256 3.5166 -0.055
20-year bond 100-64/256 3.8565 -0.051
30-year bond 98-36/256 3.7286 -0.049
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 27.50 0.50
spread
U.S. 3-year dollar swap 18.25 1.00
spread
U.S. 5-year dollar swap 7.50 0.00
spread
U.S. 10-year dollar swap -0.50 -0.25
spread
U.S. 30-year dollar swap -41.00 -0.25
spread
(Reporting by David Randall; editing by Jonathan Oatis and Kirsten Donovan)
Messaging: david.randall.thomsonreuters.com@reuters.net))