Yields of the one-month Treasury bill fell more than 20 basis points to 3.79%, bringing it back below 4% after spiking higher Tuesday. The security, which is often seen as a proxy for cash, could be among the most affected by a continued standoff over raising the U.S. borrowing limit.
The U.S. House of Representatives may vote on a bill that would sharply cut spending in exchange for a short-term increase in the debt ceiling on Wednesday.
"The re-emergence of First Republic issues and other potential regional bank issues are certainty causing a bit of a flight to quality, and then you fold into that the drama around the debt ceiling and it looks like the Treasury market will continue to be volatile," said Stephen Hooker, a portfolio manager at Newfleet Asset Management.
Shares of First Republic tumbled another 33% to a record low Wednesday after a
CNBC report
that U.S. government officials were currently unwilling to
intervene in the the bank's rescue process.
The yield on 10-year Treasury notes was
down 0.8 basis point to
3.390 %, while the yield on the 30-year Treasury bond was
down 0.8 basis point to
3.644
%.
Bond yields move in the opposite direction of prices.
New orders for key U.S.-manufactured capital goods
fell 0.4% in March , more than the 0.1% expected by economists polled by Reuters, while data for February was revised downward to show a 0.7% decline, rather than the previous estimate of a 0.1% decline, the Commerce Department said.
U.S. stocks broadly rose Wednesday following strong forecasts from bellwethers including Microsoft Corp and Boeing Co .
"The economy still has residual strength despite a raft of reports indicating an advancing slowdown," said Quincy Krosby, chief global strategist for LPL Financial.
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 -50.7 basis points.
April 26 Wednesday 10:46AM New York / 1446 GMT
Price Current Net
Yield % Change
(bps)
Three-month bills 4.975 5.1083 -0.012
Six-month bills 4.7725 4.972 -0.003
Two-year note 99-246/256 3.8955 0.000
Three-year note 100-78/256 3.6404 0.000
Five-year note 100-204/256 3.4473 0.003
Seven-year note 101-68/256 3.4179 -0.003
10-year note 100-228/256 3.392 -0.006
20-year bond 101-144/256 3.7621 -0.006
30-year bond 99-168/256 3.6438 -0.008
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 31.75 6.25
spread
U.S. 3-year dollar swap 18.00 0.75
spread
U.S. 5-year dollar swap 7.25 0.25
spread
U.S. 10-year dollar swap -0.25 0.25
spread
U.S. 30-year dollar swap -42.50 -0.50
spread
(Reporting by David Randall; Editing by Jonathan Oatis and Andrea Ricci)
Messaging: david.randall.thomsonreuters.com@reuters.net))