TREASURIES-Yield curve steepens before 30-year auction

    By Karen Brettell
    NEW YORK, Sept 10 (Reuters) - U.S. Treasury yields rose on
Thursday and the yield curve steepened before the government
will sell $23 billion in 30-year bonds, the final sale of $108
billion in new coupon-bearing supply this week.
    The Treasury has been increasing the size of its auctions
across the curve as it pays for stimulus meant to boost the
economy after coronavirus lockdowns.
    The Treasury saw weak demand for a record large sale of
30-year bonds at its August refunding. Thursday's auction is up
from $19 billion at July's reopening but below the $26 billion
sold last month. 
    "The curve is steepening a little today, consistent with the
supply this week," said Jon Hill, an interest rate strategist at
BMO Capital Markets in New York.
    Benchmark 10-year note yields rose less than a
basis point to 0.710%. Thirty-year bond yields
increased one basis point to 1.473%.
    The yield curve between two-year and 10-year notes
 steepened one basis point to 56 basis points and
the curve between five-year notes and 30-year bonds
 steepened two basis points to 118 basis points.
    The Treasury saw slightly soft demand for a $35 billion sale
of 10-year notes on Wednesday, and a record $50 billion sale of
three-year notes on Tuesday.
    The Treasury market is also taking cues from the stock
market, which has seen increased volatility for the past week.
    "In some ways rates are beholden to the path of stocks at
least in a short time frame, just because there are a lot of
concerns about these elevated equity valuations and if we see a
substantial leg lower in equities it's likely that we're going
to see a significant rally in bonds," Hill said.
    Wall Street's main indexes opened higher on Thursday as
momentum from demand for cheaper tech-related stocks
overshadowed elevated weekly jobless claims that suggested a
choppy economic rebound.
    Data on Thursday showed that the number of Americans filing
new claims for unemployment benefits hovered at high levels last
week, strengthening views that the labor market was settling
into a more gradual path of recovery from the coronavirus
pandemic.
    
      September 10 Thursday 9:44AM New York / 1344 GMT
                               Price                  
 US T BONDS DEC0               175-15/32    -0-8/32   
 10YR TNotes DEC0              139-68/256   -0-8/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.115        0.1166    0.005
 Six-month bills               0.1225       0.1243    -0.003
 Two-year note                 99-244/256   0.1489    0.004
 Three-year note               99-218/256   0.1746    0.003
 Five-year note                99-216/256   0.2817    0.004
 Seven-year note               100-28/256   0.484     0.002
 10-year note                  99-48/256    0.7099    0.007
 20-year bond                  97-156/256   1.261     0.012
 30-year bond                  97-160/256   1.4734    0.013
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         7.75        -0.50    
 spread                                               
 U.S. 3-year dollar swap         6.50        -0.25    
 spread                                               
 U.S. 5-year dollar swap         6.00         0.00    
 spread                                               
 U.S. 10-year dollar swap        0.25         0.00    
 spread                                               
 U.S. 30-year dollar swap      -38.00         0.00    
 spread                                               
                                                      
 

    

 (Reporting by Karen Brettell; Editing by Will Dunham)
  

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