February 5, 2020 / 2:57 PM / 16 days ago

TREASURIES-Yields rise on reports of coronavirus treatment, job gains

    By Ross Kerber
    BOSTON, Feb 5 (Reuters) - U.S Treasury yields rose on
Wednesday as traders reacted to positive reports on efforts to
counter the coronavirus and a strong private-sector jobs report.
    The benchmark 10-year yield was up 3.8 basis
points in morning trading at 1.6387%.
    Other U.S. and European markets also reacted to early
reports that a Chinese university team found a drug to treat
virus victims and to UK researchers saying they made a
"significant breakthrough" in finding a vaccine.
    "We are finally discounting the effects of the coronavirus,"
said Tom di Galoma, managing director of Seaport Global
Holdings. He cautioned that traders' risk appetite could be
coming too soon, as more is known about the epidemic's economic
impact.
    "There might be some bad news that could play out here," he
said.
    The World Health Organization played down media reports on
Wednesday of breakthrough drugs. 
    China said another 65 people had died as of Tuesday, the
highest daily total yet, taking the overall toll on the mainland
to 490, most in and around the locked-down central city of
Wuhan, where the new virus emerged late last year. 
    There have been two deaths outside mainland China - in the
Philippines and Hong Kong - both following visits to
Wuhan.
    Separately U.S. private-sector payrolls rose by 291,000 jobs
in January, ADP reported on Wednesday, nearly double a forecast
and the highest increase since May 2015.
    In addition, the early results of Iowa's Democratic
presidential primary released late on Tuesday showed the
moderate former South Bend, Indiana, Mayor Pete Buttigieg with a
narrow lead in state delegates over progressive U.S. Senator
Bernie Sanders of Vermont.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up 2.6 basis
points at 1.4411% in morning trading.
    
      February 5 Wednesday 9:44AM New York / 1444 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.54         1.5718    -0.002
 Six-month bills               1.5275       1.565     0.000
 Two-year note                 99-223/256   1.4411    0.026
 Three-year note               100-48/256   1.4345    0.033
 Five-year note                99-154/256   1.4582    0.036
 Seven-year note               99-152/256   1.5616    0.038
 10-year note                  101          1.6387    0.038
 30-year bond                  105-172/256  2.1171    0.037
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.00        -0.25    
 spread                                               
 U.S. 3-year dollar swap         2.50         0.00    
 spread                                               
 U.S. 5-year dollar swap         0.25         0.00    
 spread                                               
 U.S. 10-year dollar swap       -4.50         0.25    
 spread                                               
 U.S. 30-year dollar swap      -32.50         0.25    
 spread                                               
 
 (Reporting by Ross Kerber; editing by Jonathan Oatis)
  
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