June 18, 2020 / 3:08 PM / 19 days ago

TREASURIES-Yields fall as coronavirus spread dents risk appetite

 (Adds auctions, updates prices)
    By Karen Brettell
    NEW YORK, June 18 (Reuters) - U.S. Treasury yields fell on
Thursday after cases of the novel coronavirus rose in several
U.S. states, raising concerns that the economy may not bounce
back as quickly as hoped.
    Several U.S. states reported a surge in new coronavirus
infections on Wednesday and the daily count of infections also
hit a new benchmark in California and Texas.
    Around 400 workers also tested positive for the virus at an
abattoir in northern Germany, while a Chinese medical expert
said Beijing had brought its recent outbreak under control.

    “The focus right now is what’s going on with the virus,”
said Zach Griffiths, an interest rate strategist at Wells Fargo
in Charlotte, North Carolina. “Markets are trying to balance
some more positive economic data with virus outbreaks.”
    Benchmark 10-year Treasury yields dipped three
basis points to 0.704%. They rose as high as 0.959% on June 5
after data showed that employers unexpectedly added jobs in May,
but have fallen since as optimism over the speed of the economic
recovery has ebbed.
    The yield curve between two-year and 10-year notes
 flattened three basis points to 51 basis points.
    Data on Thursday showed that initial claims for state
unemployment benefits totaled a seasonally adjusted 1.508
million for the week ended June 13, down from 1.566 million in
the prior week, and the 11th straight weekly drop after reaching
a record 6.867 million in late March.
    Factory activity in the U.S. mid-Atlantic region rebounded
sharply in June, offering hope that the manufacturing sector was
regaining its footing.
    The Treasury will sell $15 billion in five-year Treasury
Inflation-Protected Securities (TIPS) on Thursday.
    It will also sell $134 billion in two-year, five-year and
seven-year notes next week.
    
      June 18 Thursday 11:01AM New York / 1501 GMT
                               Price                  
 US T BONDS SEP0               177-2/32     0-28/32   
 10YR TNotes SEP0              138-200/256  0-48/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.155        0.1572    -0.021
 Six-month bills               0.17         0.1725    -0.008
 Two-year note                 99-221/256   0.1953    -0.002
 Three-year note               100-22/256   0.2212    -0.005
 Five-year note                99-156/256   0.3296    -0.009
 Seven-year note               99-204/256   0.5298    -0.020
 10-year note                  99-64/256    0.7035    -0.030
 20-year bond                  97-236/256   1.2432    -0.044
 30-year bond                  94-112/256   1.4809    -0.042
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         5.75        -0.75    
 spread                                               
 U.S. 3-year dollar swap         4.00        -0.25    
 spread                                               
 U.S. 5-year dollar swap         3.25        -0.25    
 spread                                               
 U.S. 10-year dollar swap       -3.00         0.00    
 spread                                               
 U.S. 30-year dollar swap      -50.75         0.25    
 spread                                               
                                                      
 

    

 (Reporting by Karen Brettell; Editing by Bernadette Baum)
  
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