TREASURIES-U.S. yields rise with retail sales

BY Reuters | ECONOMIC | 09/16/21 03:54 PM EDT
    (Updates prices)
    By Rodrigo Campos
    NEW YORK, Sept 16 (Reuters) - U.S. government bond yields
rose on Thursday after a surprisingly strong reading in retail
sales lifted some concerns about growth in the world's largest
    The unexpected rebound in retail sales reported by the
Commerce Department, on the back of stronger online purchases,
clashes against recent downgrades on estimates for U.S. gross
domestic product for the current quarter that have kept downward
pressure on yields.
    The move higher on the 10-year yield, which hit a one-week
peak of 1.351% earlier on Thursday, nearly offsets downward
moves from earlier in the week, which came after lower inflation
readings, and leaves the benchmark yield barely changed since
last Friday.
    "It's a little bit of a realignment of expectations for
growth, generally being viewed as a positive sign," said Subadra
Rajappa, head of U.S. rates strategy at Societe Generale in New
York, adding it is hard to read too much into a sole data point.
    "We did see a very strong bull flattening of the curve,
following the CPI number earlier on this week. You've seen a
little bit of a reversal on the back of that," Rajappa said.
    The yield on 10-year Treasury notes was up 2.9
basis points at 1.333%.
    The yield on the 30-year Treasury bond was up
1.2 basis points at 1.881%.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on 2- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 111.4 basis points, near the midpoint of
this week's range. The 5-year to 30-year spread rose to 104.6
bps, on track to close the week at or near its flattest in 13
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up 0.4 basis
points at 0.217%.

    September 16 Thursday 3:45PM New York / 1945 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.04         0.0406    0.000
 Six-month bills               0.0475       0.0482    0.000
 Two-year note                 99-210/256   0.2173    0.004
 Three-year note               99-196/256   0.4539    0.016
 Five-year note                99-152/256   0.8339    0.034
 Seven-year note               99-248/256   1.1297    0.035
 10-year note                  99-60/256    1.3327    0.029
 20-year bond                  98-204/256   1.8223    0.017
 30-year bond                  102-184/256  1.8807    0.012

                               Last (bps)   Net
 U.S. 2-year dollar swap        10.75         0.25
 U.S. 3-year dollar swap        12.25         0.75
 U.S. 5-year dollar swap        10.25         0.25
 U.S. 10-year dollar swap        3.50         0.25
 U.S. 30-year dollar swap      -23.50         0.50

 (Reporting by Rodrigo Campos, additional reporting by Lucia
Mutikani; Editing by Steve Orlofsky and Will Dunham)

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