The yield on 10-year Treasury notes ticked up 7.2 basis points to 3.55%, while the yield on 30-year notes rose 7.6 basis points to just under 3.80%.
Ten-year yields have seen little in the way of significant shifts in recent weeks, as the market continues to price in a 25-basis point hike from the U.S. Federal Reserve's next Federal Open Markets Committee meeting on Wednesday. Monday's upward tick comes after news that the government had seized First Republic and JPMorgan would acquire most of the its assets, the latest development in banking sector turmoil. "The short-term fluctuations are probably driven more by news around First Republic," said Eric Winograd, senior U.S. economist at money manager AllianceBernstein in New York. First Republic's demise is likely to lead banks and other lenders to further tighten credit standards, Winograd said. "That will do some of the Fed's work for them, and so it mitigates the need for additional rate hikes," Winograd said. The gap between two- and 10-year Treasury yields - a closely watched indicator of economic expectations - was last at negative 56.5 basis points. Monday's Treasury selloff also comes amid expectations of a slew of corporate bond issuance ahead of Wednesday's Fed meeting, including from Facebook parent Meta. "Anytime a new deal comes, there are Treasury hedges that get put on either before or at the time of pricing," said Tom di Galoma, co-head of rates trading at BTIG in New York. The latest purchasing managers' index data on Monday from ISM and S&P showed continued improvement in April, albeit at a slower pace than in March. GDP figures last week showed slower economic growth than expected, while the personal consumption expenditure index rose from the previous quarter. Several other key economic indicators will be released this week. These include the Friday release of non-farm payroll employment figures, which will help the Fed gauge how much further it needs to go in fighting inflation.
May 1 Monday 1:33PM New York / 1733 GMT
Price
US T BONDS JUN3 129-29/32 -1-24/32
10YR TNotes JUN3 114-168/256 -0-140/2
56
Price Current Net
Yield % Change
(bps)
Three-month bills 4.895 5.0217 -0.082
Six-month bills 4.89 5.094 0.042
Two-year note 99-137/256 4.12 0.056
Three-year note 99-196/256 3.8342 0.056
Five-year note 99-130/256 3.6085 0.070
Seven-year note 99-124/256 3.584 0.079
10-year note 99-148/256 3.5509 0.099
30-year bond 96-240/256 3.7973 0.120
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 28.75 0.50
spread
U.S. 3-year dollar swap 17.25 0.00
spread
U.S. 5-year dollar swap 9.25 0.75
spread
U.S. 10-year dollar swap 2.00 1.25
spread
U.S. 30-year dollar swap -41.25 0.25
spread
(Reporting by Matt Tracy; Editing by Will Dunham and Alexander Smith)
