* U.S. jobless claims fall from previous week * U.S. housing starts, Philly Fed index worse than expected * U.S 10-year, 30-year yields fall to two-week lows * U.S. 2-year yields drop to fresh three-year low (Recasts, adds analyst comment, details, Treasury table, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, April 16 (Reuters) - U.S. Treasury yields fell on Thursday for a third session, pressured by more data showing how the coronavirus pandemic has choked the world's largest economy, as debates mounted about reopening businesses in the United States, the epicenter of the outbreak. U.S. 10-year and 30-year yields dropped to two-week lows, while those on two-year notes slid to a new three-year trough. The yield curve also continued to flatten. Thursday's data showed initial claims for state unemployment benefits dropped to a seasonally adjusted 5.245 million for the week ended April 11. Data for the prior week was revised to show 9,000 more applications received than previously reported, taking the tally for that period to 6.615 million. A total of 22.034 million people have filed claims for jobless benefits since March 21. U.S. housing numbers, meanwhile, were worse than expected, along with the Philadelphia Fed business conditions index which was the lowest since 1980. U.S. yields were little changed after the data. "Everyone knows that the numbers are going to be bad," said Patrick Leary, chief market strategist, at broker-dealer Incapital in Chicago. "The question is: how bad does it get and what are our chances of recovery and when. We're looking at how bad the data get before it runs the corner. That's why you're not seeing huge reactions," he added. U.S. President Donald Trump on Thursday plans to announce new guidelines to reopen the economy after a monthlong shutdown to curb the spread of the novel coronavirus, despite concerns from health experts, state governors and business leaders about a potential resurgence of cases in the absence of more testing and protocols.[ nL2N2C40CH] In morning trading, U.S. 10-year yields fell to 0.596%, from 0.641% late on Wednesday. "Since rates are so low, they don't have a lot of room to rally too hard," said Incapital's Leary. "So we're kind of stuck in this range of 0.6% to 0.8%." Yields on U.S. 30-year bonds were at 1.217%, down from 1.275% on Wednesday. On the short end of the curve, U.S. two-year yields were last at 0.190%, down from Wednesday's 0.205%. Earlier in the session, two-year yields sank to 0.187%, the lowest since April 2017. The yield curve flattened for a second straight day on Thursday, with the spread between the 10-year and two-year narrowing to 40 basis points, from 43 basis points on Tuesday. It was the flattest in more than a week. The curve has steepened since the beginning of the outbreak as investors have piled into short-term debt, having ruled out rate hikes in the immediate future. April 16 Thursday 11:07AM New York / 1507 GMT Price US T BONDS JUN0 181-10/32 0-24/32 10YR TNotes JUN0 139-68/256 0-28/256 Price Current Net Yield % Change (bps) Three-month bills 0.16 0.1627 0.006 Six-month bills 0.18 0.1827 -0.012 Two-year note 100-90/256 0.1946 -0.010 Three-year note 100-12/256 0.2343 -0.013 Five-year note 100-216/256 0.3281 -0.013 Seven-year note 100-232/256 0.4923 -0.014 10-year note 108-128/256 0.6078 -0.033 30-year bond 119-144/256 1.2161 -0.059 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 21.50 1.25 spread U.S. 3-year dollar swap 15.50 1.25 spread U.S. 5-year dollar swap 12.00 -0.25 spread U.S. 10-year dollar swap 6.50 0.00 spread U.S. 30-year dollar swap -38.00 -1.00 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Bernadette Baum)
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