March 5, 2020 / 4:09 PM / 23 days ago

TREASURIES-U.S. Treasuries rally as coronavirus impacts spread

    By Karen Pierog
    NEW YORK, March 5 (Reuters) - U.S. Treasuries rallied on
Thursday as the market weighed the implications of increasing
coronavirus quarantines on the global economy.
    The 10-year Treasury yield has fallen in 10 of the last 11
sessions, slipping below 1% for the first time ever on Tuesday
after the Federal Reserve cut interest rates by 50 basis points
in response to the virus' widening impact. 
    Yields on two-year notes fell to their lowest in nearly four
years.
    Jim Vogel, senior interest rate strategist at FHN Financial
in Memphis, attributed the bond rally to more corporations
ordering  workers to stay at home and not travel.
    "That's another element people are trying to process through
the market," he said, adding that while the virus was initially
seen as affecting supplies of goods, it now could reduce demand
as well.
    Amazon.com Inc and Facebook Inc on Thursday
joined Microsoft Corp in recommending employees in the
Seattle area to work from home after several people in the
region were infected with the coronavirus.
    Globally, there have been over 95,300 cases and more than
3,200 deaths, according to a Reuters tally.  
    In late morning trading, U.S. 10-year yields
fell to 0.931% from 0.992% late on Wednesday.
    Yields on U.S. 30-year bonds were at 1.585%,
down from 1.636% on Wednesday. They touched an all-time trough
of 1.507% on Tuesday.
    U.S. 2-year yields were last at 0.581%, after hitting
0.554%, the lowest since July 2016.
    Ahead of Friday's release of the February employment report,
the number of Americans filing for unemployment benefits fell
last week, suggesting the labor market was on solid footing
despite the coronavirus outbreak.
    
      March 5 Thursday 10:53AM New York /1553 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.68         0.6925    -0.013
 Six-month bills               0.555        0.5643    -0.100
 Two-year note                 101-17/256   0.5835    -0.055
 Three-year note               102-56/256   0.6136    -0.043
 Five-year note                102-48/256   0.6779    -0.051
 Seven-year note               102-10/256   0.8239    -0.056
 10-year note                  105-100/256  0.9312    -0.061
 30-year bond                  109-212/256  1.5864    -0.050
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         8.00         2.50    
 spread                                               
 U.S. 3-year dollar swap         6.50         1.25    
 spread                                               
 U.S. 5-year dollar swap         6.50         0.75    
 spread                                               
 U.S. 10-year dollar swap       -0.75         0.25    
 spread                                               
 U.S. 30-year dollar swap      -41.00        -1.00    
 spread                                               
 
 (Reporting by Karen Pierog; Additional reporting by Gertrude
Chavez-Dreyfuss; Editing by Richard Chang)
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