(Adds auction results, remarks) By Herbert Lash NEW YORK, Jan 20 - Treasury prices traded little changed on Wednesday after Joe Biden, who has pledged to jump-start a battered U.S. economy with a $1.9 trillion stimulus plan, was sworn in as U.S. president and $24 billion of 20-year Treasury bonds were sold at auction. A slight rise in Treasury prices pushed yields down, with the benchmark 10-year note trading at 1.090%. Biden was expected to sign executive orders and memorandums in the Oval Office of the White House in the afternoon, making his first moves on the coronavirus pandemic and climate change. Biden also will begin the process of re-entering the Paris climate accord and issue a sweeping order tackling climate change, including revoking the presidential permit granted to the disputed Keystone XL oil pipeline, aides said. The S&P 500 and the Nasdaq stock indices hit all-time highs on optimism about a COVID-19 vaccine and bets on a bigger pandemic relief plan under a Democrat-controlled Congress. The government sale of 20-year Treasury bonds was a bit weak, yielding a full basis point higher at 1.657% than the market price at the bidding deadline, said Lou Brien, market strategist at DRW Trading in Chicago. "It was not dramatically weak," Brien said, adding the auction was one of only eight the government has held at the 20-year term. Yields on the 20-year bond traded at 1.646, barely higher than 1.64% at the close on Tuesday. A recent run-up in yields since the start of 2021 seems to have stalled for the moment, Brien said. The government will sell $15 billion in 10-year TIPS at auction on Thursday. A surge in the bond market"s best gauge of the pace of future inflation could be underestimating how long the economic shock from the pandemic will last as investors piled into 10-year Treasury Inflation Protected Securities, or TIPS. TIPS yields traded lower at -1.043%. U.S. homebuilder confidence in the market for single family homes unexpectedly fell in January, pulled down by surging COVID-19 infections and more expensive lumber that tempered expectations for stronger growth but augured rising inflation. Investors expects data for December on housing starts, building permits and home sales on Thursday will generally show a still strong market. Analysts expect building permits and housing to post gains of 5.9% and 1.2%, respectively, while existing home sales to have fallen by 2.5%. The yield curve between two-year and 10-year notes rose slightly to 96.50 basis points from 95.60 bid at the close on Tuesday. The U.S. 10-year inflation breakeven rate, the yield difference between 10-year Treasuries and 10-year TIPS, rose to 2.113% on Tuesday, the highest in more than two years, The inauguration is something the market is looking past at this point, said Tom Simons, money market economist at Jefferies LLC, in New York. Yields jumped last week ahead of Biden stimulus plans, but have since traded in a narrow range, backing off from a sudden rise at the start of 2021. January 20 Wednesday 2:02PM New York / 1902 GMT Price Current Net Yield % Change (bps) Three-month bills 0.08 0.0811 -0.008 Six-month bills 0.09 0.0913 -0.005 Two-year note 99-254/256 0.129 -0.002 Three-year note 99-202/256 0.1959 -0.005 Five-year note 99-166/256 0.447 0.000 Seven-year note 99-4/256 0.7709 -0.002 10-year note 98-4/256 1.0887 -0.003 20-year bond 95-120/256 1.6438 0.004 30-year bond 95-16/256 1.8409 0.002 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 7.50 0.50 spread U.S. 3-year dollar swap 7.25 0.75 spread U.S. 5-year dollar swap 7.75 0.75 spread U.S. 10-year dollar swap 0.25 0.50 spread U.S. 30-year dollar swap -26.25 0.00 spread (Reporting by Herbert Lash Editing by Mark Heinrich and Nick Zieminski)
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