TREASURIES-Longer-term yields rise further as investors embrace risk

BY Reuters | TREASURY | 11/24/20 12:31 PM EST
    (Recasts, updates yields, adds analyst comment)
    By Karen Pierog
    CHICAGO, Nov 24 (Reuters) - U.S. Treasury yields on the
longer end of the curve extended their rise on Tuesday as
investors rushed to riskier investments, including soaring
stocks.
    The benchmark 10-year yield was last up 2.7
basis points at 0.8865% and the yield curve steepened.
    Stan Shipley, fixed income strategist at Evercore ISI in New
York, said investors, driven by hopes of a closer economic
recovery, were ditching the safe haven of Treasuries for riskier
commodities and stocks.
   "With yields of 85 or 88 basis points, that's not very
attractive on the 10-year (note), and (people are) going to look
for returns elsewhere," he said.
    Economic rebound hopes spurred by progress on coronavirus
vaccines, along with the commencement of President-elect Joe
Biden's transition process three weeks after the election,
pushed stocks higher and lifted the Dow Jones Industrial Average
over the 30,000 mark for the first time.

    Following auctions of two- and five-year notes on Monday,
the U.S. Treasury will offer $56 billion of seven-year notes
later on Tuesday.
     The two-year U.S. Treasury yield, which
typically moves in step with interest rate expectations, was
last down less than a basis point at 0.1641%.
   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 last at 72.10 basis points, 3 basis points
higher than Monday's close.
   November 24 Tuesday 12:16AM New York / 1816 GMT
                               Price


                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.0875       0.089     0.000
 Six-month bills               0.09         0.0913    0.000
 Two-year note                 99-236/256   0.1641    -0.005
 Three-year note               100-24/256   0.2183    -0.003
 Five-year note                99-224/256   0.4003    0.005
 Seven-year note               98-252/256   0.6501    0.016
 10-year note                  99-228/256   0.8865    0.027
 20-year bond                  99-124/256   1.4047    0.043
 30-year bond                  100-92/256   1.6098    0.047

   DOLLAR SWAP SPREADS
                               Last (bps)   Net
                                            Change
                                            (bps)
 U.S. 2-year dollar swap         9.25         0.75
 spread
 U.S. 3-year dollar swap         8.75         1.25
 spread
 U.S. 5-year dollar swap         6.50         0.00
 spread
 U.S. 10-year dollar swap       -0.50         0.00
 spread
 U.S. 30-year dollar swap      -31.75         0.00
 spread



 (Reporting by Karen Pierog; editing by Jonathan Oatis)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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