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Bonds News

TREASURIES-Yields steady despite soaring jobless claims

 (Adds analyst comment, updates market activity)
    By Ross Kerber
    BOSTON, April 2 (Reuters) - U.S. Treasury yields were little
changed on Thursday despite a  record rise in jobless claims, as
investors struggled with the unprecedented data and tried to
gauge when the coronavirus pandemic's economic impact might
peak.
    The benchmark 10-year yield was down 2.4 basis
points at 0.6111% in afternoon trading. 
    That was close to where it stood at 8:30 a.m. EDT (1230
GMT), when the U.S. Labor Department reported the number of
Americans filing claims for unemployment benefits last week shot
to a record high for a second week in a row - topping 6
million.
    More jurisdictions enforced stay-at-home measures to curb
the pandemic, which economists say has pushed the economy into
recession.
    A closely watched portion of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes was at 39 basis points, 1.5 basis points higher than
Wednesday's close.   
    Major Wall Street indexes were up on hopes of a truce
between major oil producers, also helping stabilize
yields. 
    Analysts contacted by Reuters said the subdued market
reaction suggested the jobless numbers were so wide they were
hard to fit into traditional models.
    "The bad data is being priced in. We know that a large part
of the economy is shutting down, so maybe people just expected
an outlandish number," said Priya Misra, head of global rates
strategy at TD Securities in New York.
    "Now the market is more focused on the length of time the
shutdown will last," she said.
    The two-year U.S. Treasury yield was down 1.4
basis points at 0.2196% in afternoon trading. It reached as low
as 0.202% overnight, its lowest level since 2013.
    The figure typically moves in step with interest rate
expectations. The Fed has already cut its target interest rate
range to nearly zero and most analysts do not see that changing
anytime soon in the face of the worsening pandemic, bringing the
yield down.
    "Barring a big uptick in inflation, it's likely they will
stay there two years," said Guy LeBas, chief fixed income
strategist for Janney Montgomery Scott. 
      April 2 Thursday 2:17PM New York / 1817 GMT
                               Price                  
 US T BONDS JUN0               181-29/32    0-25/32   
 10YR TNotes JUN0              138-252/256  0         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.095        0.0966    0.023
 Six-month bills               0.1525       0.1547    0.021
 Two-year note                 100-79/256   0.2196    -0.014
 Three-year note               100-172/256  0.271     -0.008
 Five-year note                100-160/256  0.3735    0.005
 Seven-year note               100-176/256  0.5247    -0.004
 10-year note                  108-128/256  0.6111    -0.024
 30-year bond                  118-128/256  1.2553    -0.034
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        23.25        -0.50    
 spread                                               
 U.S. 3-year dollar swap        15.50        -0.25    
 spread                                               
 U.S. 5-year dollar swap        12.25        -0.50    
 spread                                               
 U.S. 10-year dollar swap        5.50        -1.00    
 spread                                               
 U.S. 30-year dollar swap      -40.50         1.00    
 spread                                               
 
 (Reporting by Ross Kerber in Boston
Editing by Jonathan Oatis and Matthew Lewis)
  
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