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TREASURIES-Traders send down yields on lower stocks, global virus concerns

 (Updates with market activity, economist comment)
    By Ross Kerber
    April 20 (Reuters) - Investors sent most U.S. Treasury
yields lower on Tuesday as they moved out of stocks and eyed
challenges many countries still face from the COVID-19 pandemic.
    The benchmark 10-year yield was down 3.5 basis
points at 1.5642% in early afternoon trading after spending much
of the morning near 1.6%.
    The move down in yields came as the S&P 500 and the Dow
traded lower for a second straight day, with investors pinning
their hopes on results from Netflix and other major
tech-related companies this week to help sustain an upbeat start
to the earnings season.
    Tufts University economist Brian Bethune said the lower
yields stood in contrast with their level close to 1.8% on March
30 and showed investors worried that public health gains against
the virus have stalled in Brazil, Canada and other
countries.
    Even though the U.S. economic recovery looks strong, Bethune
 said, "There's a repricing of what the international
environment is going to look like."
     The benchmark yield remained above its multi-week low of
1.528% reached April 15. Investors will watch the results of a
$24 billion auction of 20-year bonds by the U.S. Treasury set
for Wednesday.
    U.S. Federal Reserve Chair Jerome Powell said the U.S.
economy will temporarily see "a little higher" inflation this
year as activity strengthens and supply constraints push up
prices in some sectors, but the Fed is committed to keeping any
overshoot within limits, according to an April 8 letter seen by
Reuters.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 141 basis points, about 4 basis points
lower than Monday's close.       
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was down less
than a basis point at 0.1532%. 
      April 20 Tuesday 12:46 PM New York / 1646 GMT
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.0275       0.0279    0.000
 Six-month bills               0.0425       0.0431    0.000
 Two-year note                 99-242/256   0.1532    -0.008
 Three-year note               100-40/256   0.3223    -0.019
 Five-year note                99-198/256   0.7968    -0.032
 Seven-year note               100-24/256   1.2358    -0.036
 10-year note                  96-4/256     1.5642    -0.035
 20-year bond                  95-144/256   2.1511    -0.028
 30-year bond                  91-164/256   2.2619    -0.031
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap        11.50         0.25    
 spread                                               
 U.S. 3-year dollar swap        12.25         0.50    
 spread                                               
 U.S. 5-year dollar swap         8.50         0.75    
 spread                                               
 U.S. 10-year dollar swap       -1.50         0.75    
 spread                                               
 U.S. 30-year dollar swap      -28.25         1.00    
 spread (Reporting by Ross Kerber in Boston; Editing by Susan Fenton
and Steve Orlofsky)
  
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