June 19, 2020 / 7:18 PM / 23 days ago

TREASURIES-Yields erase earlier rise on concerns about spread of coronavirus

 (Recasts with yield move, adds quote, Powell comments, updates
prices)
    By Karen Brettell
    NEW YORK, June 19 (Reuters) - U.S. Treasury yields gave up
earlier gains on Friday as the spread of the novel coronavirus
in some U.S. states cast doubts on whether the economy will
bounce back as quickly as hoped.
    Apple Inc said on Friday it is temporarily shutting
some stores again in Florida, Arizona, South Carolina, and North
Carolina.
    California, North Carolina and a string of U.S. cities
mandated or urged mandatory mask use on Thursday to get a grip
on spiraling coronavirus cases as at least six states set daily
records.
    Benchmark 10-year note yields were little
changed on the day at 0.699%, after earlier rising to 0.745%.
    The yield curve between two-year and 10-year notes
 was steady on the day at 51 basis points.
    Yields had risen earlier on Friday as risk sentiment
improved after Bloomberg News reported that China will
accelerate purchases of U.S. farm goods to comply with the Phase
One trade deal with the United States.
    But 10-year yields have failed to break above an 11-week
high of 0.959% reached on June 5, when data showed that
employers unexpectedly added jobs in May.
    “Even before the pandemic we were still in an environment
where growth and inflation were not in any danger of
overheating,” said Michael Lorizio, senior fixed income trader
at Manulife Asset Management in Boston. “So I think it makes
sense that the most liquid fixed income asset in the world is
going to continue to be sought after.”
    Federal Reserve Chair Jerome Powell said on Friday that the
U.S. economic recovery from the novel coronavirus epidemic is
set to be challenging and there will be no quick fix.

    The U.S. central bank earlier this month signaled it plans
years of extraordinary support for the economy, with
policymakers projecting the economy to shrink 6.5% in 2020 and
the unemployment rate to be 9.3% at year's end.
      June 19 Friday 2:52PM New York / 1852 GMT
                               Price                  
 US T BONDS SEP0               177-8/32     -0-5/32   
 10YR TNotes SEP0              138-196/256  -0-16/25  
                                            6         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.1525       0.1547    -0.002
 Six-month bills               0.17         0.1725    -0.002
 Two-year note                 99-225/256   0.1876    -0.007
 Three-year note               100-24/256   0.2184    -0.003
 Five-year note                99-160/256   0.3266    0.001
 Seven-year note               99-204/256   0.5298    0.007
 10-year note                  99-76/256    0.6986    0.005
 20-year bond                  98-28/256    1.2324    0.007
 30-year bond                  94-172/256   1.4709    0.010
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         6.50         0.50    
 spread                                               
 U.S. 3-year dollar swap         4.50         0.25    
 spread                                               
 U.S. 5-year dollar swap         3.50         0.25    
 spread                                               
 U.S. 10-year dollar swap       -2.25         0.50    
 spread                                               
 U.S. 30-year dollar swap      -49.75         0.75    
 spread                                               
                                                      
 

    
    

 (Editing by Chizu Nomiyama)
  
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