June 25, 2020 / 2:20 PM / 8 days ago

TREASURIES-Yields fall as COVID-19, jobs report cloud economic view

    By Ross Kerber
    June 25 (Reuters) - U.S. Treasury yields fell on Thursday as
traders bought safe-haven assets while the COVID-19 pandemic
continued to spread and layoffs stayed high.
    The benchmark 10-year yield was down 2.5 basis
points at 0.6593%.
    The trading followed a similar pattern on Wednesday and
brought the note's yield far below its monthly high of 0.959%
reached on June 5.
    Initial claims for state unemployment benefits totaled a
seasonally adjusted 1.48 million for the week ended June 20,
down from 1.54 million in the prior week, the Labor Department
said on Thursday, but still a large number, buttressing views
the labor market could take years to recover.
    The figures came alongside investor concerns that the United
States has failed to stop the spread of the coronavirus, driving
up demand for treasuries, said Michael Lorizio, senior fixed
income trader for Manulife Investment Management.
    "These significant spikes of cases in different areas of the
country have rightfully caused investors to re-examine their
expectations for recovery," Lorizio said.
    On Wednesday several states ordered new quarantines for some
travelers, Walt Disney Co delayed the reopening of its
theme parks, and Nevada's governor signed a directive requiring
face coverings in casinos and all other public places.

    Wall Street opened lower Thursday, also reflecting unnerved
    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 48 basis points, about a basis point lower
than its close on Wednesday and its lowest since a week ago.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was down less
than a basis point at 0.1818%.
    The Treasury Department is scheduled to release the results
of an auction of seven-year notes in the early afternoon.
      June 25 Thursday 9:44AM New York / 1344 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.14         0.142     -0.010
 Six-month bills               0.17         0.1725    0.002
 Two-year note                 99-227/256   0.1818    -0.006
 Three-year note               100-34/256   0.2051    -0.003
 Five-year note                99-170/256   0.3178    -0.012
 Seven-year note               100          0.5       -0.018
 10-year note                  99-172/256   0.6593    -0.025
 20-year bond                  99-56/256    1.1691    -0.038
 30-year bond                  96-72/256    1.4027    -0.043
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         6.75         0.50    
 U.S. 3-year dollar swap         5.00         0.25    
 U.S. 5-year dollar swap         3.50        -0.75    
 U.S. 10-year dollar swap       -1.25         0.25    
 U.S. 30-year dollar swap      -48.50         0.00    

 (Reporting by Ross Kerber in Boston; Editing by Andrea Ricci)
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