TREASURIES-Yields higher as traders look to Wednesday auction

       By Ross Kerber
    April 19 (Reuters) - U.S. Treasury yields were higher on
Monday as world stock markets climbed and traders looked ahead
to a Wednesday bond auction.
    The benchmark 10-year yield was up 4.1 basis
points at 1.6135%, continuing its increase from multiweek lows
reached April 15.
    Investors were watching to gauge the market's appetite for
$24 billion of 20-year bonds scheduled to be auctioned on
Wednesday, said Justin Lederer, Cantor Fitzgerald Treasury
analyst.
    Stronger economic expectations could also drive up yields on
midterm five-year and seven-year notes this week, he said, but
investors seem uncertain whether to resume the trends that drove
the benchmark 10-year yield to 1.776% on March 30, the highest
since before the COVID-19 pandemic.
    "It still feels like we're trying to establish a range
here," Lederer said.
    World stock markets hit record highs in the European session
on Monday, as markets were generally upbeat about the prospects
for a global economic recovery from COVID-19, ahead of a busy
week for earnings.
    Coca-Cola Co (KO) trounced estimates for quarterly profit
and revenue on Monday, fueled by strong demand for its sodas as
vaccine rollouts and relaxed restrictions in Asia encouraged
consumers to return to their pre-pandemic routines.
    Overnight repurchase rates, which measure the cost of
borrowing short-term cash using Treasuries or other debt
securities as collateral, have turned negative in some recent
cases, a trend analysts say could prompt the Fed to lift the
short-term rates it manages.
    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 145 basis points, about 2 basis points
higher than Friday's close.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was nearly
unchanged at 0.1652%.

      April 19 Monday 9:18AM New York / 1318 GMT
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.02         0.0203    0.002
 Six-month bills               0.04         0.0406    -0.002
 Two-year note                 99-236/256   0.1652    0.002
 Three-year note               100-18/256   0.3513    0.008
 Five-year note                99-128/256   0.8535    0.030
 Seven-year note               99-184/256   1.2924    0.037
 10-year note                  95-148/256   1.6135    0.041
 20-year bond                  94-240/256   2.1912    0.042
 30-year bond                  90-220/256   2.3002    0.037

   DOLLAR SWAP SPREADS
                               Last (bps)   Net
                                            Change
                                            (bps)
 U.S. 2-year dollar swap        11.25         0.00
 spread
 U.S. 3-year dollar swap        12.00         0.00
 spread
 U.S. 5-year dollar swap         7.75        -0.50
 spread
 U.S. 10-year dollar swap       -2.00         0.00
 spread
 U.S. 30-year dollar swap      -28.50        -0.25
 spread


 (Reporting by Ross Kerber in Boston; editing by Jonathan Oatis)

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