TREASURIES-Yields edge lower after U.S. durable goods data

       By Chuck Mikolajczak
    Sept 25 (Reuters) - U.S. Treasury yields edged lower on
Friday in the wake of an upbeat report on U.S. durable goods,
while equities were choppy in early trading, alternating between
gains and losses.
    The Commerce Department said orders for non-defense capital
goods excluding aircraft, a closely watched proxy for business
spending plans, rose 1.8% in August, above the 0.5% forecast.

    The report did little, however, to change views that the
economy was stalling in its recovery from coronavirus-induced
lockdowns as government support to businesses and the unemployed
peters out.
    "Overall, it is more trends and it doesn’t feel that data is
going to cause some massive volatility in the market the way it
did and the way it will in six months," said Justin Lederer, an
interest rate strategist at Cantor Fitzgerald in New York.
    Democrats in the U.S. House of Representatives are working
on a $2.2 trillion coronavirus stimulus package that could be
voted on next week, a key lawmaker said on Thursday, as House
Speaker Nancy Pelosi reiterated that she is ready to negotiate
with the White House.
    Analysts at Jefferies noted that while the report points to
a large capital expenditures contribution to economic growth in
the third quarter, sustaining the momentum beyond that "will be
difficult."
    The yield on 10-year Treasury notes was down 0.8
basis point to 0.656%.
    Even with the move lower, the yield on the 10-year remained
within the 6-basis-point range it has held since the Federal
Reserve's most recent policy statement on Sept. 16.
    "Overall the market remains fairly rangebound. There is some
intraday, intra-week volatility that when you really look at it,
we just don’t go anywhere," said Lederer.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was
down 0.6 basis point to 0.129%.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 52.5 basis points, up slightly from a
two-week low of 51.2 hit on Monday.

      September 25 Friday 11:02AM New York / 1502 GMT
                               Price
 US T BONDS DEC0               177-4/32     0-5/32
 10YR TNotes DEC0              139-172/256  0-24/256
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.0975       0.0989    0.000
 Six-month bills               0.105        0.1065    -0.002
 Two-year note                 99-254/256   0.1289    -0.006
 Three-year note               99-238/256   0.1488    -0.010
 Five-year note                99-240/256   0.2626    -0.012
 Seven-year note               99-126/256   0.4488    -0.013
 10-year note                  99-180/256   0.6561    -0.008
 20-year bond                  99-24/256    1.1762    -0.007
 30-year bond                  99-124/256   1.3961    -0.005

   DOLLAR SWAP SPREADS
                               Last (bps)   Net
                                            Change
                                            (bps)
 U.S. 2-year dollar swap         8.75        -0.25
 spread
 U.S. 3-year dollar swap         8.25         0.00
 spread
 U.S. 5-year dollar swap         6.50         0.00
 spread
 U.S. 10-year dollar swap        2.25         0.00
 spread
 U.S. 30-year dollar swap      -34.00         0.00
 spread


 (Reporting by Chuck Mikolajczak; Editing by Dan Grebler)

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