TRÉSORIES-U.S. Yields over 2 years and 10 years fall to more than two months

                By Gertrude Chavez-Dreyfuss
NEW YORK, March 15 (Reuters) - 10-year and 2-year benchmark
US Treasury yields on Friday dropped to their lowest levels since
early January, weighed down by the United States weaker than expected
the economic data that suggested the Federal Reserve will hold
stable interest rates for the rest of the year.
Expectations that the Federal Reserve strikes a dovish
tone at next week's political meeting also put pressure on yields,
the badysts said.
US 10-year and 30-year yields declined in seven
of the last 10 sessions, reflecting the benign inflation outlook
and slower growth of the world's largest economy.
Data showed Friday that US manufacturing output has fallen
0.4% in February, down for a second consecutive month,
while the activity of factories in the state of New York was weaker than
waited this month with a reading of 3.7.
After the data, US yields at 3 and 5 years briefly
reversed, which could bode badly for the economy.
Some badysts, however, have indicated that movements between two short-term maturities
the deadlines do not really offer a clear overview of the obligation
economic prospects of the market.
"The data was generally disappointing ... and that's why we
see this rally go on as he did, "said Ben Jeffery,
badyst at BMO Capital Markets.
In the late morning, 10-year US prices rose, yields
fell to 2.581% against 2.63% late on
Thursday. Yields at 10 years have fallen to a low of more than two months of
2.580 percent.
US 30-year bond yields rose 3.007%
from 3.046 percent Thursday.
On the bottom of the curve, US yields at 2 years slipped
2,433%, compared to 2,461% on Thursday
, after falling earlier to 2.430%, the lowest
since January 4th.
US yields rose a little more after better than expected performance
Consumer sentiment report from the University of Michigan, which showed
an index of 97.8, higher than the consensus forecast and the
reading from the previous month.
"As the weekend approaches, people are also preparing to
what could be a dovish FOMC (open Federal Reserve)
Steering Committee), "said Jeffery of BMO.
Analysts unanimously expect FOMC to leave policy rates
unchanged.
"The most interesting development will be what the
point-type signals about their intentions for the rest of the
year, "said Michael Feroli, chief US economist at JP Morgan in
New York.
Median projection of Fed officials on the number of rates
increases is commonly referred to as its "dot-plot".
"We suspect the midpoint of going down both hikes
they reported in December either no hiking or a hike for
this year. We see slightly higher odds of zero than a ", Feroli
I said.

March 15 Friday 10:47 am New York / 14:47 GMT



Net current price
Yield in%
(Bps)
Three months bills 2.395 2.4424 -0.010
Six-month bills 2.445 2.5093 -0.013
Two-year bill 100-31 / 256 2.4357 -0.025
Three-year note 99-248 / 256 2,33858-0,032
Five-year note 99-236 / 256 2.3917 -0.038
Seven-year note 100-32 / 256 2.4802 -0.045
10-year bill 100-84 / 256 2.5871 -0.043
Obligation at age 30 99-184 / 256 3.0143-0.032

SWAP SPREADS DOLLAR
Last (bps) net
Change
(Bps)
US dollar swap at 2 years 12.00 1.25
spread
US dollar swap at 3 years 10.00 1.00
spread
US dollar swap at 5 years 7.00 0.75
spread
US dollar swap at 10 years 1,75 0,75
spread
30-year US Dollar Swap - 22.25 0.50
spread

(Report by Gertrude Chavez-Dreyfuss, edited by Jonathan
Oatis)