×

TREASURIES-U.S. yields rise as U.S.-North Korea tensions ease

NEW YORK, Aug 14 (Reuters) - U.S. Treasury yields rose on Monday with benchmark yields bouncing from six-week lows as reduced tensions between the United States and North Korea led investors to pare back on their holdings of low-risk government debt. Last week, fears of a military showdown between the two nations over Pyongyang's goal to target mainland U.S. with its nuclear weapons caused a rush into Treasuries, yen, Swiss franc and gold. Since the weekend, South Korean President Moon Jae-in urged for a peaceful solution to the situation, while U.S. National Security Adviser H.R. McMaster downplayed a military conflict.

In the wake of these comments, some investors stepped back into the stock market and other risky assets. U.S. stock index futures pointed to Wall Street opening higher. At 8:59 a.m. (1256 GMT), the yield on benchmark 10-year Treasury notes was 2.222 percent, up over 3 basis points from late on Friday. On Friday, it hit a six-week trough at 2.182 percent. Two-year Treasury yield rose 2 basis points to 1.314 percent after hitting an eight-week low of 1.286 percent on Friday following softer-than-expected inflation data for July, which lowered traders' expectations the Federal Reserve would raise interest rates by year-end. August 14 Monday 8:59AM New York / 1259 GMT Price

US T BONDS SEP7 154-29/32 -0-18/32 10YR TNotes SEP7 126-136/256 -0-72/25

6

Price Current Net Yield % Change

(bps)

Three-month bills 1.025 1.0418 0.003 Six-month bills 1.1225 1.1444 0.002 Two-year note 100-30/256 1.3141 0.020 Three-year note 100-24/256 1.4679 0.024 Five-year note 100-124/256 1.7725 0.031 Seven-year note 100-148/256 2.0354 0.036 10-year note 100-60/256 2.2237 0.037 30-year bond 98-172/256 2.8159 0.029

DOLLAR SWAP SPREADS

Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 25.50 -0.25

spread

U.S. 3-year dollar swap 20.50 0.25

spread

U.S. 5-year dollar swap 7.75 -0.25

spread

U.S. 10-year dollar swap -4.25 0.00

spread

U.S. 30-year dollar swap -33.25 0.25

spread

(Reporting by Richard Leong; Editing by Chizu Nomiyama)