CORRECTED-TREASURIES-Yields rise as strong retail sales calm recession fear

Karen Brettell
Updated ·2 min read
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(Corrects 10-year yield's historical comparison in fourth paragraph) By Karen Brettell NEW YORK, May 17 (Reuters) - U.S. Treasury yields rose on Tuesday after data showed that retail sales increased strongly in April, reducing fears that the American economy is likely to fall into recession as the Federal Reserve aggressively hikes interest rates. Retail sales rose 0.9% last month. Data for March was revised higher to show sales advancing 1.4% instead of 0.5%, as previously reported. April's increase in retail sales, which reflected both strong demand and higher prices, was in line with economists' expectations. The data “showed no sign that the consumer is cracking under the weight of inflation, higher interest rates or the lack of stimulus payments,” Jefferies economists Aneta Markowska and Thomas Simons said in a report. Benchmark 10-year Treasury yields hit a 3-1/2-year high of 3.203% on May 9 as investors adjusted for the prospect of the Fed continuing to hike rates at a fast pace as it tackles soaring inflation. But they have dipped in the past week as investors also worry that the rapid monetary tightening may strangle growth and send the economy into a downturn. The 10-year yields were last at 2.955%, up 7 basis points on the day. The yield curve between two-year and 10-year yields flattened two basis points to 29 basis points. May 17 Tuesday 11:20AM New York / 1520 GMT Price Current Net Yield % Change (bps) Three-month bills 1.0475 1.0649 -0.002 Six-month bills 1.5225 1.5556 0.029 Two-year note 99-177/256 2.663 0.095 Three-year note 99-186/256 2.8459 0.099 Five-year note 99-54/256 2.9222 0.102 Seven-year note 99-100/256 2.9725 0.091 10-year note 99-80/256 2.9549 0.076 20-year bond 85-220/256 3.3604 0.054 30-year bond 94-184/256 3.1484 0.064 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 27.25 -0.75 spread U.S. 3-year dollar swap 12.00 -0.25 spread U.S. 5-year dollar swap 3.00 -1.00 spread U.S. 10-year dollar swap 6.00 -0.50 spread U.S. 30-year dollar swap -26.50 -1.00 spread (Reporting by Karen Brettell; editing by Jonathan Oatis)