February 14, 2020 / 2:43 PM / 8 days ago

TREASURIES-Yields decline on virus concerns and consumer data

    By Ross Kerber
    BOSTON, Feb 14 (Reuters) - U.S. Treasury yields declined on
Friday as investors bought safe-haven government debt ahead of a
long holiday weekend after soft retail sales data and on
continuing caution about the coronavirus epidemic in China.
    The benchmark 10-year yield was down 3 basis
points in morning trading at 1.5866%.
    James Barnes, director of fixed income at Bryn Mawr Trust,
cited concerns about the coronavirus in China and a report that
core U.S. retail sales were unchanged for January.
    Traders also reduced risk in their portfolios heading into
the weekend, wary of what news might emerge about the virus,
similar to trading on previous Fridays. U.S. markets are closed
on Monday for Presidents Day.
    "Traders are more comfortable going into the weekend" with
less risk, he said, adding that many believe "There's more risk
to the downside than to the upside."   
    U.S. Commerce Department data showed U.S. consumer spending
appeared to have slowed further in January, with sales at
clothing stores declining by the most since 2009, which could
raise concerns about the economy's ability to continue its
moderate expansion.
    Commerce said retail sales excluding automobiles, gasoline,
building materials and food services were unchanged last month,
weaker than the 0.3 percent ries economists had predicted in a
Reuters poll. Data for December was revised down.
    China's National Health Commission said it had recorded 121
new deaths and 5,090 new coronavirus cases on the mainland on
Thursday, taking the total number of infected to 63,851. Some
55,748 people are being treated, while 1,380 have died of the
virus.    
    Policymakers pledged to do more to stimulate economies hit
by the virus, helping Asian stock markets edge
higher.
    The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was  down 2 basis
points at 1.4217% in morning trading.
    
      February 14 Friday 9:21AM New York / 1421 GMT
                                                      
                                                      
                                                      
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             1.545        1.5766    -0.010
 Six-month bills               1.515        1.5518    -0.008
 Two-year note                 99-233/256   1.4217    -0.020
 Three-year note               99-240/256   1.3964    -0.022
 Five-year note                99-208/256   1.4143    -0.026
 Seven-year note               99-244/256   1.5071    -0.031
 10-year note                  99-52/256    1.5866    -0.030
 30-year bond                  99-44/256    2.037     -0.041
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         2.50        -0.50    
 spread                                               
 U.S. 3-year dollar swap         1.00        -0.50    
 spread                                               
 U.S. 5-year dollar swap        -0.75        -0.50    
 spread                                               
 U.S. 10-year dollar swap       -5.75        -0.50    
 spread                                               
 U.S. 30-year dollar swap      -32.75         0.00    
 spread                                               
 
 (Reporting by Ross Kerber; Editing by David Gregorio)
  
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