* U.S. 2-year/10-year yield curve steepens * Total COVID-19 cases surge again * Near-term risk for yields tilted to upside - analyst * Fed likely to do more, to keep lid on rates - analyst (Adds comment, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, Nov 13 (Reuters) - U.S. Treasury yields were mostly higher on Friday after trading lower for most of the week, as investors consolidated positions ahead of the weekend and remained cautious overall given the surge in novel coronavirus cases. The yield curve, one indicator of risk sentiment, steepened on Friday, after flattening in the previous session, with the spread between two-year and 10-year notes widening to 71.20 basis points. The U.S. Centers for Disease Control and Prevention (CDC) on Friday reported 10,508,864 cases of coronavirus, an increase of 194,610 cases from its previous count, and said the number of U.S. deaths had risen by 1,147 to 242,216. COVID-19 concerns have kept a lid on rates despite positive vaccine news from Pfizer. Federal Reserve Chairman Jerome Powell has expressed concern about the surge in coronavirus cases and on Thursday repeated his view that more action from the Federal Reserve and Congress, in the form of further fiscal stimulus, will likely be needed. "It's increasingly likely that the Fed either announces shifting maturities to buy longer-term Treasuries or it announces an expanded purchase program with more discrete parameters," said Bill Merz, director of fixed income at U.S. Bank Wealth Management in Minneapolis. "That's one more thing that should support the recovery over the long run and help keep longer-term bond yields from running away from here. It should prevent rates from shooting significantly higher," he added. In late afternoon trading, U.S. benchmark 10-year yields were up at 0.893%, from 0.886% late on Thursday. Ten-year yields crept higher as U.S. stocks advanced on Friday. "Yields will probably edge into a slightly higher range, but we do not expect a violent sell-off," said Michael Purves, chief executive officer, at Tallbacken Capital Advisors in a research note on Friday. "A bridge to a post-COVID world is a long one, and likely to be filled with wobbles. Powell will do his part to stabilize the bridge." He added that U.S. 10-year yields are likely to track a range of between 0.8% to 1.2% over the next few months. U.S. 30-year yields slipped to 1.648% from Thursday's 1.652%. On the front end of the curve, U.S. two-year yields were slightly up at 0.179% from 0.177% on Thursday. Friday's data showing slightly better-than-expected producer prices and darkening consumer sentiment had little impact on the Treasury debt market. U.S. producer prices increased a bit more than expected in October to 0.3%, while the University of Michigan's consumer sentiment index dropped to 77 early this month from a final reading of 81.8 in October. November 13 Friday 3:31PM New York / 2031 GMT Price Current Net Yield % Change (bps) Three-month bills 0.09 0.0913 0.000 Six-month bills 0.095 0.0964 -0.005 Two-year note 99-229/256 0.1791 0.002 Three-year note 100-12/256 0.2343 0.002 Five-year note 99-62/256 0.4046 0.009 Seven-year note 98-252/256 0.6496 0.010 10-year note 99-212/256 0.893 0.007 20-year bond 94-248/256 1.418 -0.002 30-year bond 99-120/256 1.6475 -0.004 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.25 0.00 spread U.S. 3-year dollar swap 7.25 0.00 spread U.S. 5-year dollar swap 5.75 0.00 spread U.S. 10-year dollar swap -0.75 0.00 spread U.S. 30-year dollar swap -33.75 1.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Kirsten Donovan/Sonya Hepinstall/Ken Ferris)
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