TREASURIES-Prices little changed as Biden presidency begins - Reuters

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 (Adds auction results, remarks)
    By Herbert Lash
    NEW YORK, Jan 20 - Treasury prices traded little changed on
Wednesday after Joe Biden, who has pledged to jump-start a
battered U.S. economy with a $1.9 trillion stimulus plan, was
sworn in as U.S. president and $24 billion of 20-year Treasury
bonds were sold at auction.
    A slight rise in Treasury prices pushed yields down, with
the benchmark 10-year note trading at 1.090%.
    Biden was expected to sign executive orders and memorandums
in the Oval Office of the White House in the afternoon, making
his first moves on the coronavirus pandemic and climate change.

    Biden also will begin the process of re-entering the Paris
climate accord and issue a sweeping order tackling climate
change, including revoking the presidential permit granted to
the disputed Keystone XL oil pipeline, aides said.
    The S&P 500 and the Nasdaq stock indices hit all-time highs
on optimism about a COVID-19 vaccine and bets on a bigger
pandemic relief plan under a Democrat-controlled Congress.

    The government sale of 20-year Treasury bonds was a bit
weak, yielding a full basis point higher at 1.657% than the
market price at the bidding deadline, said Lou Brien, market
strategist at DRW Trading in Chicago.
    "It was not dramatically weak," Brien said, adding the
auction was one of only eight the government has held at the
20-year term. 
    Yields on the 20-year bond traded at 1.646,
barely higher than 1.64% at the close on Tuesday.
    A recent run-up in yields since the start of 2021 seems to
have stalled for the moment, Brien said. 
    The government will sell $15 billion in 10-year TIPS at
auction on Thursday. 
    A surge in the bond market's best gauge of the pace of
future inflation could be underestimating how long the economic
shock from the pandemic will last as investors piled into
10-year Treasury Inflation Protected Securities, or TIPS.

    TIPS yields traded lower at -1.043%.
    U.S. homebuilder confidence in the market for single family
homes unexpectedly fell in January, pulled down by surging
COVID-19 infections and more expensive lumber that tempered
expectations for stronger growth but augured rising inflation.

    Investors expects data for December on housing starts,
building permits and home sales on Thursday will generally show
a still strong market. Analysts expect building permits and
housing to post gains of 5.9% and 1.2%, respectively, while
existing home sales to have fallen by 2.5%.  
    The yield curve between two-year and 10-year notes
 rose slightly to 96.50 basis points from 95.60
bid at the close on Tuesday.
    The U.S. 10-year inflation breakeven rate, the yield
difference between 10-year Treasuries and 10-year TIPS, rose to
2.113% on Tuesday, the highest in more than two years, 
    The inauguration is something the market is looking past at
this point, said Tom Simons, money market economist at Jefferies
LLC, in New York.
    Yields jumped last week ahead of Biden stimulus plans, but
have since traded in a narrow range, backing off from a sudden
rise at the start of 2021.
    
      January 20 Wednesday 2:02PM New York / 1902 GMT
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.08         0.0811    -0.008
 Six-month bills               0.09         0.0913    -0.005
 Two-year note                 99-254/256   0.129     -0.002
 Three-year note               99-202/256   0.1959    -0.005
 Five-year note                99-166/256   0.447     0.000
 Seven-year note               99-4/256     0.7709    -0.002
 10-year note                  98-4/256     1.0887    -0.003
 20-year bond                  95-120/256   1.6438    0.004
 30-year bond                  95-16/256    1.8409    0.002
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         7.50         0.50    
 spread                                               
 U.S. 3-year dollar swap         7.25         0.75    
 spread                                               
 U.S. 5-year dollar swap         7.75         0.75    
 spread                                               
 U.S. 10-year dollar swap        0.25         0.50    
 spread                                               
 U.S. 30-year dollar swap      -26.25         0.00    
 spread (Reporting by Herbert Lash
Editing by Mark Heinrich and Nick Zieminski)
  

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January 21, 2021 at 02:32AM
https://www.reuters.com/article/usa-bonds/treasuries-prices-little-changed-as-biden-presidency-begins-idUSL1N2JV1UF

TREASURIES-Prices little changed as Biden presidency begins - Reuters

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