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TREASURIES-U.S. yields slide after Trump halts stimulus talks

    * Trump halts coronavirus-related stimulus talks
    * U.S. yields fall across the board
    * U.S. yield curve flattens after Trump comments

 (Adds analyst comment, yield curve action, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Oct 6 (Reuters) - U.S. Treasury yields dropped
from four-month peaks after President Donald Trump on Tuesday
called off negotiations with Democratic lawmakers on a
coronavirus relief stimulus package until after the Nov. 3
election.
    U.S. yields fell across the board, while the yield curve
flattened after the news.
    In an about-face from his administration's stance of
committing to a stimulus package before the election, Trump said
relief talks will resume after the election, and he accused
House of Representatives Speaker Nancy Pelosi of not negotiating
in good faith.
    "Stocks fell and the Treasuries rallied because they had
been doing the opposite, based on the idea for the last week or
so that there would indeed be a stimulus package and relatively
soon," said Lou Brien, market strategist, at DRW Trading in
Chicago.
    "So this pulls the rug out from both of those moves, and I
think what we're seeing is at least the fast money reacting to
those statements."
    In afternoon trading, U.S. 10-year yields
dropped to 0.746%, from 0.762% late on Monday, after earlier
rising to 0.792%, the highest level since June.
    Yields on U.S. 30-year bonds were at 1.551%,
down from 1.567% on Monday. Earlier, 30-year yields climbed to a
four-month peak of 1.61%.
    The U.S. yield curve flattened after Trump's bombshell, with
the spread of two-year and 10-year yields narrowing to 60 basis
points, after hitting its widest since June. The
gap between the five-year and 30-year contracted to 123 basis
points, after touching 127 basis points, the
largest gap since early June, as well.
      October 6 Tuesday 3:26PM New York / 1926 GMT Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.0975       0.0989    0.000
 Six-month bills               0.11         0.1116    -0.002
 Two-year note                 99-245/256   0.1467    0.002
 Three-year note               99-212/256   0.1837    -0.002
 Five-year note                99-174/256   0.3149    -0.009
 Seven-year note               98-254/256   0.5222    -0.015
 10-year note                  98-216/256   0.7469    -0.015
 20-year bond                  96-172/256   1.316     -0.016
 30-year bond                  95-212/256   1.5501    -0.017
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         8.25         0.25    
 spread                                               
 U.S. 3-year dollar swap         7.50         0.25    
 spread                                               
 U.S. 5-year dollar swap         6.75         0.25    
 spread                                               
 U.S. 10-year dollar swap        2.25         0.75    
 spread                                               
 U.S. 30-year dollar swap      -36.75         0.75    
 spread (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Karen Brettell; Editing by Nick Zieminski and Will Dunham)
  
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