February 6, 2020 / 8:27 PM / 11 days ago

TREASURIES-Yields flat as traders watch for economic impact of coronavirus

 (Updates with market activity, analyst comment)
    By Ross Kerber
    NEW YORK, Feb 6 (Reuters) - U.S. Treasury yields were little
changed on Thursday as investors weighed whether China's efforts
to contain the spreading coronavirus would be enough to minimize
its economic impact.
    The benchmark 10-year yield was down less than a
basis point at 1.6422% in afternoon trading.
    The coronavirus dragged down production at more global
businesses on Thursday and the death toll jumped by 73 to 563,
with more than 28,000 confirmed infections in China, the world's
second-largest economy.
    China's announcement of a tariff cut on some imports from
the United States was seen by analysts as a move to boost
confidence in China's efforts to contain the economic fallout
from the coronavirus outbreak. Wall Street's main
stock indexes hit record highs.
    But bond markets were more subdued ahead of jobs and payroll
data due on Friday.
    "There wasn't much driving price action today," said Priya
Misra, head of global rates strategy at TD Securities. After
several sessions in which rates rose, "I think there are some
chips being taken off the table," she said.
    Other data Thursday showed the number of Americans filing
for unemployment benefits dropped to a nine-month low last week,
suggesting a tightening labor market would continue keep the
longest economic expansion in history on track.
    The U.S. economy is, however, likely to remain on a moderate
growth path, with other data on Thursday showing worker
productivity rebounding less than expected in the fourth
quarter.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up less than
a basis point at 1.4472% in afternoon trading.

  February 6 Thursday 3:10PM New York / 2010 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.5425       1.5743    0.012
 Six-month bills               1.54         1.5779    0.010
 Two-year note                 99-220/256   1.4472    0.006
 Three-year note               100-44/256   1.4399    0.005
 Five-year note                99-152/256   1.4598    0.000
 Seven-year note               99-148/256   1.564     -0.002
 10-year note                  100-248/256  1.6422    -0.007
 30-year bond                  105-200/256  2.1123    -0.021
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         5.75        -0.25    
 spread                                               
 U.S. 3-year dollar swap         2.50         0.00    
 spread                                               
 U.S. 5-year dollar swap         0.50         0.00    
 spread                                               
 U.S. 10-year dollar swap       -4.50         0.00    
 spread                                               
 U.S. 30-year dollar swap      -32.25         0.25    
 spread                                               
 



 (Reporting by Ross Kerber; Editing by Dan Grebler and Grant
McCool)
  
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