February 12, 2020 / 6:02 PM / 15 days ago

TREASURIES-Yields higher as new coronavirus cases reportedly decline

    By Ross Kerber
    BOSTON, Feb 12 (Reuters) - U.S. Treasury yields rose on
Wednesday as investors showed a renewed appetite for risk
following a reported drop in the number of new coronavirus cases
in China.
    The benchmark 10-year yield was up 3.8 basis
points in midday trading at 1.6282%.
    Investors moving away from bonds who bid up other assets,
including U.S. stocks, were also encouraged by the latest
quarterly earning reports.
    "There seems to be better risk appetite," said John Briggs,
head of strategy, Americas, at NatWest Markets. Wednesday's 
trading, he said, reflects "a removal of the flight-to-quality"
seen in recent days.
    Briggs said Treasury markets were likely not affected by
comments from U.S. Federal Reserve chairman Jerome Powell, who
on Wednesday reiterated his confidence in the sustainability of
the record-long U.S. economic expansion.
    "There’s no reason why the current situation of low
unemployment, rising wages, high job creation - there’s no
reason why it can’t go on," Powell told the Senate Banking
Committee in his second day of congressional testimony.

    China on Wednesday reported its lowest number of new
coronavirus cases since January, lending weight to a prediction
by its top medical adviser that the outbreak will end by
    However, it was still unclear to what extent economic growth
would take a hit from the virus, which has killed more than
1,100 people, shuttered businesses in China and briefly disputed
global stock market rally in the past weeks.        
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up 2.3 basis
points at 1.4397% in midday trading.
      February 12 Wednesday 12:37PM New York / 1737 GMT
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             1.545        1.5769    -0.002
 Six-month bills               1.52         1.5573    0.007
 Two-year note                 99-224/256   1.4397    0.023
 Three-year note               99-224/256   1.4178    0.027
 Five-year note                99-172/256   1.4437    0.035
 Seven-year note               99-180/256   1.5451    0.036
 10-year note                  101-24/256   1.6282    0.038
 30-year bond                  106-80/256   2.089     0.037
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap         4.25         1.25    
 U.S. 3-year dollar swap         2.50         2.00    
 U.S. 5-year dollar swap         0.50         1.25    
 U.S. 10-year dollar swap       -4.75         1.25    
 U.S. 30-year dollar swap      -32.50         1.00    

 (Reporting by Ross Kerber; editing by Jonathan Oatis)
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