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TREASURIES-Yields dip as U.S. coronavirus cases surge

Tue, 30th Jun 2020 15:12

By Karen Pierog
CHICAGO, June 30 (Reuters) - U.S. Treasury yields headed
lower on Tuesday as investors fixated on a continued surge in
the nation's coronavirus cases that could dampen hopes for an
economic rebound.
The benchmark 10-year yield was last down 1.4
basis points at 0.6217%, while the yield on the five-year note,
which hit a record low of 0.266% earlier in the session, was
last down 1.4 basis points at 0.2673%.
Collin Martin, fixed income strategist at Schwab Center for
Financial Research in New York, said a surge in virus cases in
parts of the United States was overshadowing economic data.
"It's not that we're not looking at the numbers anymore. But
if we're getting data from May and early June, they might not
matter as much if we're seeing cases rise," he said.
"That seems to be the reason why we're seeing 10-year yields
drop lately. They're back to pretty much the low end of their
coronavirus trading range," he added.
California and Texas reported record spikes in new COVID-19
infections on Monday, while Arizona closed bars, nightclubs,
gyms, movie theaters and water parks for at least 30 days.

Later on Tuesday, Federal Reserve Chair Jerome Powell will
testify before the U.S. House of Representatives Financial
Services Committee. In prepared remarks, Powell said the path
forward depends on "policy actions taken at all levels of
government" to support the economic recovery.
A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, which is viewed as an indicator of
economic expectations, was at 47.70 basis points, less than a
basis point higher than at Monday's close.
June 30 Tuesday 8:52AM New York / 1352 GMT

Price Current Net
Yield % Change
Three-month bills 0.145 0.1471 -0.003
Six-month bills 0.1625 0.1653 -0.005
Two-year note 99-244/256 0.1485 -0.012
Three-year note 100-66/256 0.1625 -0.010
Five-year note 99-234/256 0.2673 -0.014
Seven-year note 100-68/256 0.4614 -0.012
10-year note 100-8/256 0.6217 -0.014
20-year bond 99-196/256 1.1382 -0.019
30-year bond 96-252/256 1.3734 -0.017

Last (bps) Net
U.S. 2-year dollar swap 7.25 0.50
U.S. 3-year dollar swap 5.75 0.00
U.S. 5-year dollar swap 3.50 0.00
U.S. 10-year dollar swap -2.25 0.00
U.S. 30-year dollar swap -49.75 0.25

(Reporting by Karen Pierog;
Editing by Sandra Maler)

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