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TREASURIES-Yields tumble amid mixed signals on stimulus

 (Recasts, updates yields, adds analyst comments)
    By Karen Pierog
    CHICAGO, Oct 13 (Reuters) - U.S. Treasury yields moved lower
on Tuesday as disparate views in Washington over the next move
on coronavirus aid contributed to a risk-off tone in markets.
    The benchmark 10-year yield was last down 4.4
basis points at 0.7305%.
    "On stimulus, there's still a divide," said Eric Souza,
senior portfolio manager at SVB Asset Management in San
Francisco, adding that the discord eased concerns over growing
supply of Treasury debt.
    A new funding package to combat the economic fallout from
the pandemic remained up in the air on Tuesday as U.S. Senate
Majority Leader Mitch McConnell said his chamber would vote on
$500 billion of targeted funding next week, while President
Donald Trump tweeted "Go big or go home!!!" Earlier
on Tuesday, U.S. House Speaker Nancy Pelosi said the White
House's latest $1.8 trillion offer falls "significantly short"
of what is needed. 
    Kathy Jones, chief fixed income strategist at the Schwab
Center for Financial Research in New York, said while nothing is
expected ahead of the Nov. 3 election, a deal is likely
afterwards regardless of the election outcome and that could
lift yields. 
    "I think the path of least resistance is probably higher
(yields) in Treasuries but it's a slow move because we still
don't have signs of inflation or excessively strong growth," she
said. 
    Souza also noted that the risk aversion that sent Wall
Street lower followed Johnson & Johnson's announcement
it was pausing clinical trials of a COVID-19 vaccine candidate
due to an unexplained illness in a study participant.

    Risk appetite has seesawed as investors weigh a rise in the
number of U.S. coronavirus cases, deaths, hospitalizations, and
rates of positive test results against promising vaccine
developments.
    On the economic data front, the U.S. Labor Department
reported consumer prices rose for a fourth straight month in
September, but at a slower pace amid considerable slack in the
economy..
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes was last at 58.50 basis points, 3.30 basis
points lower than at Friday's close. The figure is viewed as an
indicator of economic expectations, 
    October 13 Tuesday 3:14PM New York / 2014 GMT
                               Price Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.095        0.0963    -0.005
 Six-month bills               0.115        0.1167    0.000
 Two-year note                 99-248/256   0.1409    -0.012
 Three-year note               99-214/256   0.1799    -0.018
 Five-year note                99-186/256   0.3056    -0.030
 Seven-year note               99-24/256    0.5076    -0.041
 10-year note                  99           0.7305    -0.044
 20-year bond                  97-52/256    1.2852    -0.051
 30-year bond                  96-156/256   1.5167    -0.057
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         8.75         0.25    
 spread                                               
 U.S. 3-year dollar swap         8.00         0.25    
 spread                                               
 U.S. 5-year dollar swap         7.50         0.00    
 spread                                               
 U.S. 10-year dollar swap        3.25         0.25    
 spread                                               
 U.S. 30-year dollar swap      -33.50         1.25    
 spread (Reporting by Karen Pierog; Editing by Andrea Ricci; Editing by
David Gregorio)
  
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