Wires

TREASURIES-U.S. yields fall for second day, tracking Europe, as Brexit concerns weigh

Gertrude Chavez-Dreyfuss

concerns weigh@ NEW YORK, Oct 23 (Reuters) - U.S. Treasury yields slid for a second straight session on Wednesday, in line with Europe, as investors grew more concerned about persistent uncertainty surrounding Britain's long-delayed exit from the European Union. German 10-year Bund and British government bond yields fell, pushing Treasury yields lower as well. British lawmakers on Tuesday signaled their support for the Brexit deal UK Prime Minister Boris Johnson agreed with the European Union last week. But that was offset minutes later when parliament rejected his three-day timetable to rush legislation through the House of Commons, making ratification of his deal by the Oct. 31 deadline almost impossible. "We're trading closely with European yields, although volumes are light right now," said Jim Vogel, senior rates strategist, at FTN Financial in Memphis, Tennessee. "But we're still looking at Brexit. Everything is back on the suspense file with no resolution." EU leaders considered on Wednesday whether to give Britain a three-month Brexit extension, and Johnson said that if they do so he would call an election by Christmas. In late morning trading, U.S. 10-year note yields fell to 1.738% from 1.766% late on Tuesday. Yields on 30-year bonds were down at 2.221%, from 2.251% on Tuesday. On the short-end of the curve, U.S. two-year yields were down at 1.567%, from Tuesday's 1.591%. Later on Wednesday, the U.S. Treasury is slated to auction $41 billion in five-year notes. Ahead of the auction, U.S. five-year yields dropped to 1.57% , from 1.592% late on Tuesday. "It's sort of easy to buy 5s at 1.61%," said Vogel of the upcoming auction. "Anything below 1.58% is an indication that sentiment for Treasuries is strong and following through on the good auction on 2s yesterday."

October 23 Wednesday 10:52 AM New York / 1452 GMT

Price Current NetYield % Change

(bps)

Three-month bills 1.6225 1.6563 -0.003Six-month bills 1.6025 1.6425 -0.002Two-year note 99-219/256 1.5737 -0.017Three-year note 99-112/256 1.5692 -0.019Five-year note 99-164/256 1.5759 -0.016Seven-year note 99-202/256 1.6573 -0.02110-year note 98-236/256 1.745 -0.02130-year bond 100-120/256 2.2283 -0.023

DOLLAR SWAP SPREADS

Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 3.25 1.50

spread

U.S. 3-year dollar swap -0.75 0.00

spread

U.S. 5-year dollar swap -2.25 -0.25

spread

U.S. 10-year dollar swap -7.50 -0.25

spread

U.S. 30-year dollar swap -37.50 -0.50

spread

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Lisa Shumaker)