US bond yield operates stable; corporate debt supply counteracts security search

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(Update quotes)

NEW YORK, May 4 (Reuters) – The yield on US Treasuries was unchanged on Monday, in a session in which government debt was backed by demand for safe assets due to rising tensions between Washington and Beijing, but also pressured by sales of corporate debt.

* Risk appetite declined after the United States threatened retaliation against China for the spread of the new coronavirus. However, corporate debt sales hedging kept yields off their session lows.

* “We are seeing some upward pressure today on Treasury yields,” said Jon Hill, interest rate strategist at BMO Capital Markets in New York.

* The yield on the benchmark 10-year notes operated at 0.64%, unchanged from Friday. The return on the notes has remained in a narrow band between 0.543% and 0.785% in the last month.

* “What I see is a deep lack of conviction about what is to come now,” Hill said.

* The Treasury Department will announce its second and third quarter financing needs expectations on Monday, with details on future issues on Wednesday.

* The government is facing a $ 4 trillion deficit now that it launches a stimulus plan to try to cushion the economic impact of business closings.

* Kim Rupert of Action Economics said the loan estimate for the second quarter could be about $ 1.6 trillion, with $ 1.4 trillion in debt already sold since the end of March. Needs should drop later, to around $ 500 billion in the third quarter.

(Edited in Spanish by Carlos Serrano)

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