February 27, 2020 / 2:07 PM / a month ago

TREASURIES-Yields continue decline on coronavirus concerns; 10 year hits another record low

    By Ross Kerber
    BOSTON, Feb 27 (Reuters) - U.S. Treasury yields continued to
decline on Thursday morning as traders sought safer assets, with
the yield on the benchmark 10-year note reaching an all-time low
for the third consecutive day.
    The yield on the 10-year note was down 3.4 basis
points in morning trading at 1.2755%, after reaching as low as
1.2706%. 
    Yields on other treasuries also fell, including on the
30-year bond, which also hit a new low, and on the two-year
note, which typically moves in step with interest rate
expectations. It was down 5.2 basis points in morning trading to
1.0932%, close to its lowest since late 2016.
    The movements in early trading were driven by an increase in
the number of coronavirus cases being reported worldwide,
leading to new caution on economic prospects.
     Governments ramped up measures on Thursday to battle a
looming pandemic as the number of new infections outside China  
outpaced new cases in the country where the outbreak
began.
    Meanwhile, Goldman Sachs said on Thursday that U.S.
companies will generate no earnings growth in 2020 as the
coronavirus spreads, deepening risks to global
growth.
    Growing uncertainty about the virus has driven bond yields
down quickly since January. 
    In a note to clients BMO head of U.S. rates strategy Ian
Lyngen wrote "the process of defining the lower bound for US
rates will continue for several weeks as pressure mounts for the
Fed to provide a policy response."
    Analysts will be focused on the results of an auction of
7-year notes by the U.S. Treasury later on Thursday.
    
      February 27 Thursday 8:48AM New York / 1348 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.425        1.4539    -0.064
 Six-month bills               1.3225       1.3535    -0.059
 Two-year note                 100-16/256   1.0932    -0.052
 Three-year note               100-222/256  1.0769    -0.048
 Five-year note                100-48/256   1.0863    -0.041
 Seven-year note               102-8/256    1.1934    -0.036
 10-year note                  102-24/256   1.2755    -0.034
 30-year bond                  105-112/256  1.7655    -0.033
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         3.75         0.00    
 spread                                               
 U.S. 3-year dollar swap         1.00        -0.25    
 spread                                               
 U.S. 5-year dollar swap         1.25         1.00    
 spread                                               
 U.S. 10-year dollar swap       -5.75         0.00    
 spread                                               
 U.S. 30-year dollar swap      -37.75         0.00    
 spread                                               
 
            
    







 (Reporting by Ross Kerber)
  
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