TREASURIES-Yields slip, along with U.S. stocks, before inflation data

NEW YORK, Feb 13 (Reuters) - U.S. long-dated Treasury yields slipped on Tuesday in quiet trading, tracking the decline in stocks ahead of a crucial U.S. inflation report on Wednesday that could shed more light on the pace of future interest rate increases by the Federal Reserve. "We're seeing stocks trading lower and so perhaps the Treasury market is a little bit on edge," said Gennadiy Goldberg, interest rates strategist, at TD Securities in New York. "I think overall the market is waiting for tomorrow's CPI (consumer price index) report and it's unwilling to put in strong positions ahead of that report. People want to see if it would confirm the recent trend of strong inflation and strong growth." Economists expect a 0.3 percent rise in inflation in January and a core figure of 0.2 percent, according to a Reuters poll. Investors started to worry more about inflation after a prolonged period of stagnant price gains, spooked by robust wage increases of 2.9 percent in the January U.S. jobs report, and its impact on borrowing costs. That caused sharp volatility in the stock market. U.S. 10-year yields, which move inversely to prices, have risen about 43 basis points so far this year. U.S. 30-year yields are on similar path, climbing 38 basis points in 2018. Part of the run-up, however, was not all due to events in the United States, analysts said. TD's Goldberg said global central banks such as the European Central Bank and Bank of England have started to normalize their monetary policies, pushing yields higher. That has spilled over to the U.S. Treasury market. "There is a global re-pricing of the quantitative easing trade," Goldberg said. In late-morning trading, U.S. 10-year yields fell to 2.842 percent from 2.855 percent late on Monday. U.S. 10-year yields hit 2.902 percent on Monday, the highest since January 2014. U.S. 30-year bond yields fell to 3.129 percent, from Monday's 3.136 percent. The yield on the maturity touched an 11-month peak of 3.139 percent on Monday.

February 13 Tuesday 10:48 AM EST / 1548 GMT Price

US T BONDS MAR8 144-12/32 -0-1/32 10YR TNotes MAR8 120-244/256 0-16/256 Price Current Net Yield % Change


Three-month bills 1.58 1.6084 0.007 Six-month bills 1.7625 1.8031 -0.016 Two-year note 99-206/256 2.102 0.025 Three-year note 99-208/256 2.3151 0.011 Five-year note 99-46/256 2.552 -0.002 Seven-year note 98-100/256 2.7556 -0.006 10-year note 99-44/256 2.8457 -0.009 30-year bond 97-116/256 3.1315 -0.004


Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 26.00 -1.75


U.S. 3-year dollar swap 18.00 -0.50


U.S. 5-year dollar swap 9.50 0.00


U.S. 10-year dollar swap 1.00 0.00


U.S. 30-year dollar swap -17.50 -0.50


(Reporting by Gertrude Chavez-Dreyfuss; Editing by Jeffrey Benkoe)