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Bonds News

TREASURIES-U.S. yields advance on virus optimism, but outlook still uncertain

    * U.S. virus outbreak nearing a peak -CDC official
    * Governor says worst may be over for New York
    * OPEC deal on output oil cut step in right direction
-analyst

 (Adds comment, NY's Cuomo remarks, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, April 13 (Reuters) - U.S. Treasury yields rose on
Monday, bolstered by some glimmer of hope after a major deal to
cut global oil output and address a glut that has damaged the
energy sector, amid signs the coronavirus outbreak may be
nearing a peak in the United States.
    U.S. yields were also pushed higher following comments from
New York Governor Andrew Cuomo, who said the worst may be over
for his state in terms of the pandemic and is set to announce a
coordinated regional plan on reopening business and schools
later on Monday.
    But the outlook remains extremely uncertain and any signs
that the pandemic is stabilizing should be viewed with utmost
caution, analysts said.
    "There's a little optimism in the market just on the
coronavirus front as the numbers have been encouraging," said
Collin Martin, fixed income strategist at Schwab Center for
Financial Research.
    "And over the weekend, the OPEC deal is clearly a step in
the right direction. But we're only seeing a modest uptick on
Treasury yields and that's probably indicative of the negative
effects that we're seeing and likely to see," he added.
    Volume was light, with markets in Europe closed for Easter
Monday and spurring choppy market action.
    Major oil producers over the weekend agreed to their
biggest-ever output cut. But crude prices fell on concerns even
that would not be enough to head off oversupply with the
coronavirus outbreak crushing demand.
    On the pandemic front, a top U.S. health official said on
Monday the coronavirus outbreak could reach its peak in the
United States this week, pointing to signs of stabilization
across the country.
    The United States, with the world's third-largest
population, has recorded more fatalities from COVID-19 than any
other country, more than 22,000 as of Monday morning, according
to a Reuters tally.
    Despite more positive news, risk appetite was still off,
with U.S. stocks down on Monday. 
    David Rosenberg, chief economist and strategist at Rosenberg
Research & Associates, says any notion that re-opening the
economy is  going to usher in a V-shaped recovery is misplaced.
He said a U.S. recovery can only come with "either an effective
treatment or a vaccine."
    In midday trading, U.S. 10-year yields rose to
0.728% from 0.722% late on Friday. 
    Yields on U.S. 30-year bonds were at 1.360%, up
from 1.348% on Friday. 
    On the short end of the curve, U.S. 2-year yields were last
at 0.233%, up from Friday's 0.225%. 
    The U.S. Treasury's substantial $105 billion in three-month
and six-month bill auctions were well subscribed on Monday as
demand for quality debt remained high.
    
      April 13 Monday 1:29PM New York / 1729 GMT
                               Price                  
 US T BONDS JUN0               178-23/32    -0-4/32   
 10YR TNotes JUN0              138-56/256   -0-8/256  
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.25         0.2543    0.018
 Six-month bills               0.28         0.2851    0.039
 Two-year note                 100-69/256   0.2372    0.012
 Three-year note               99-214/256   0.305     0.013
 Five-year note                100-106/256  0.4156    0.005
 Seven-year note               100-28/256   0.6089    0.007
 10-year note                  107-80/256   0.7284    0.006
 30-year bond                  115-168/256  1.3599    0.012
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        21.50        -1.50    
 spread                                               
 U.S. 3-year dollar swap        14.25        -2.00    
 spread                                               
 U.S. 5-year dollar swap        13.25        -1.00    
 spread                                               
 U.S. 10-year dollar swap        6.25        -0.75    
 spread                                               
 U.S. 30-year dollar swap      -36.75        -1.75    
 spread                                               
 
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler)
  
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