June 30, 2020 / 2:15 PM / 6 days ago

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

    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
   DOLLAR SWAP SPREADS                                
                               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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