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TREASURIES-U.S. yields tick up on strong bank earnings, manufacturing data

By Ross Kerber

By Ross Kerber BOSTON, Jan 16 (Reuters) - U.S. Treasury yields rose slightly on Thursday on strong economic data and bank earnings. The benchmark 10-year yield was up 1.2 basis points in morning trading at 1.8004%. The increase reflected factors like a strong measure of manufacturing in the Mid-Atlantic region and better-than-expected retail sales, said Tom di Galoma, managing director of Seaport Global Holdings. "Certainly there's a little bit of pressure" for economic activity to continue to increase, he said. U.S. retail sales increased for a third straight month in December, with households buying a range of goods even as they cut back on purchases of motor vehicles, the Commerce Department said on Thursday. Other data on Thursday showed the number of Americans filing claims for unemployment benefits dropped for a fifth straight week last week, indicating the labor market remained strong despite a recent slowdown in job growth. The Federal Reserve Bank of Philadelphia's business conditions index for the U.S. Mid-Atlantic region rose to 17.0 from an upwardly revised 2.4 in December. That easily topped expectations for a reading of 3.8 in January, according to a Reuters poll of economists. U.S. stock indexes opened at new highs on optimism over an initial U.S.-China trade deal and a positive start to the fourth-quarter earnings season. Morgan Stanley reported a 46% jump in quarterly profit and beat Wall Street estimates by a wide margin, the latest sign that Chief Executive James Gorman's strategic vision for the Wall Street bank is bearing fruit. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up less than a basis point at 1.5698% in morning trading. January 16 Thursday 10:11AM New York / 1511 GMT Price Current Net Yield % Change (bps) Three-month bills 1.5275 1.5589 -0.010 Six-month bills 1.53 1.5676 -0.005 Two-year note 100-27/256 1.5698 0.008 Three-year note 99-198/256 1.5778 0.011 Five-year note 100-160/256 1.6181 0.015 Seven-year note 100-40/256 1.726 0.013 10-year note 99-140/256 1.8004 0.012 30-year bond 102-188/256 2.2486 0.007 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.75 -0.25 spread U.S. 3-year dollar swap 3.25 -0.25 spread U.S. 5-year dollar swap 0.75 -0.25 spread U.S. 10-year dollar swap -4.50 -0.50 spread U.S. 30-year dollar swap -31.00 -0.50 spread (Reporting by Ross Kerber in Boston; Editing by David Gregorio)