June 24, 2020 / 1:53 PM / 8 days ago

TREASURIES-Yields steady as investors watch COVID-19 spread

    By Ross Kerber
    June 24 (Reuters) - U.S. Treasury yields held steady on
Wednesday as investors took stock of a rising COVID-19 patient
caseload in several U.S states.
    The benchmark 10-year yield was up 1.1 basis
points in morning trading at 0.7201%, and the yield on the
30-year note was unchanged at 1.489%.
    Although the United States had appeared to get ahead of the
COVID-19 pandemic in May, new cases rose 25% last week and the
top U.S. infectious disease official, Dr. Anthony Fauci, said
the next two weeks could be critical in containing the
outbreak.
    Washington state made masks mandatory in public places,
while other states saw record cases, including Arizona and
Texas, where restrictions meant to slow its spread were lifted
early.
    For investors the question is whether the trends will
require more business shutdowns, said Eric Jussaume, director of
fixed income for Cambridge Trust. 
    "What is putting a pause on the market here is whether we
will continue to have weaker economic growth" because of new or
continued restrictions needed for public health, he said.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes was at 53 basis points, roughly unchanged
from Tuesday's close.
    The measure is seen as an indicator of economic expectations
and while it is off its recent high of 72 basis points reached
on June 5 it is still well above the 2-basis-point low for 2020
reached on March 9.
     
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was down less
than a basis point at 0.1935% in morning trading.
    Investors were awaiting the results of an auction of $47
billion of five-year notes by Treasury Department, due in the
early afternoon.

  June 24 Wednesday 9:30AM New York / 1330 GMT
                               Price                  
 US T BONDS SEP0               176-28/32    -0-2/32   
 10YR TNotes SEP0              138-156/256  -0-36/25  
                                            6         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.15         0.1521    0.000
 Six-month bills               0.1725       0.175     0.000
 Two-year note                 99-221/256   0.1935    -0.002
 Three-year note               100-20/256   0.2236    0.008
 Five-year note                99-146/256   0.3379    0.013
 Seven-year note               99-176/256   0.546     0.014
 10-year note                  99-24/256    0.7201    0.011
 20-year bond                  97-208/256   1.2495    0.002
 30-year bond                  94-64/256    1.489     0.000
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.00         0.00    
 spread                                               
 U.S. 3-year dollar swap         4.50         0.00    
 spread                                               
 U.S. 5-year dollar swap         4.25         0.50    
 spread                                               
 U.S. 10-year dollar swap       -1.25         0.50    
 spread                                               
 U.S. 30-year dollar swap      -48.25         1.00    
 spread                                               
                                                      
 

    
 (Reporting by Ross Kerber in Boston; editing by Jonathan Oatis)
  
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