(New throughout, updates prices, yields, market activity and analyst comments) By Ross Kerber BOSTON, Feb 4 (Reuters) - U.S. Treasury yields rose on Tuesday as investors grew more comfortable with risk, encouraged by steps taken by China in response to the coronavirus. The benchmark 10-year yield was up 8.4 basis points in afternoon trading at 1.6043%. Fresh intervention by China's central bank calmed some nerves and helped Chinese stocks reverse some losses. Although the spread of coronavirus showed no signs of slowing, investors regarded the actions positively. The benchmark yield bounced up from near 1.5% last week and on Monday, a level that Jacob Oubina, senior economist for RBC Capital Markets, called too low given many positive U.S. economic indicators and healthy company earnings. "We were testing 150 (basis points) on tens, which was completely mis-aligned with economic fundamentals," he said. Justin Hoogendoorn, head of fixed income strategy at Piper Jaffray & Co, said he still expects more negative public health news to emerge from China and other countries dealing with the spread of the virus. But for now, he said, the bond market is in the midst of "a snapback from moving too far too fast." In a bid to cushion the epidemic's economic blow, China injected 1.7 trillion yuan ($242.74 billion) via reverse repos on Monday and Tuesday, helping Chinese stocks reverse some losses and lifting the world equity index. The monetary intervention boosted investor sentiment even as several economists cut their forecasts for 2020 global growth, with the spread of coronavirus showing no signs of slowing. The death toll from the outbreak has surpassed 420, with businesses suspending their operations in China. Equity markets surged on Tuesday in response to China's efforts. Separately investors were waiting for the full results of the Iowa caucuses, the first state contest for the U.S. Democratic presidential nomination, which got off to a chaotic start on Monday as results were delayed. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 6.2 basis points at 1.415% in afternoon trading. February 4 Tuesday 1:41PM New York / 1841 GMT Price Current Net Yield % Change (bps) Three-month bills 1.545 1.577 -0.002 Six-month bills 1.5275 1.565 0.008 Two-year note 99-236/256 1.415 0.062 Three-year note 100-70/256 1.4047 0.076 Five-year note 99-194/256 1.4255 0.082 Seven-year note 99-208/256 1.5284 0.087 10-year note 101-80/256 1.6043 0.084 30-year bond 106-136/256 2.0796 0.083 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.50 0.75 spread U.S. 3-year dollar swap 2.75 0.50 spread U.S. 5-year dollar swap 0.25 0.25 spread U.S. 10-year dollar swap -4.75 0.25 spread U.S. 30-year dollar swap -32.75 0.00 spread (Reporting by Ross Kerber; editing by Jonathan Oatis and David Gregorio)
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