(New throughout, updates prices, yields, market activity and comments) By Ross Kerber BOSTON, Feb 21 (Reuters) - U.S. Treasury yields were down on Friday as mounting concerns about the economic impact of the coronavirus epidemic drove investors into safe-haven assets. The benchmark 10-year yield was down 6.4 basis points in morning trade at 1.4611%. It was the first time the note yielded less than 1.5% since early September. The 30-year bond was down 7.1 basis points at 1.9012%. The session low was 1.892%, an all-time low. Analysts said investors were buying government debt, sending prices higher and yields lower, on worries about cases of the virus mounting beyond China, including in South Korea and Japan. "Everybody is trying to figure out how bad this will be," said Jon Hill, U.S. rates strategist for BMO Capital Markets. He noted how the move below 1.5% occurred during European trading hours and corresponded with negative coronavirus news, indicating traders were focused on the epidemic rather than economic data. Yields took another step down after a survey of purchasing managers on Friday morning showed U.S. business activity in both the manufacturing and services sectors stalled in February on coronavirus worries. U.S. stock indexes opened lower as investors scrambled for safer assets such as gold and government bonds. Traders were probably also shedding riskier assets ahead of the weekend, as in previous Friday sessions, Hill said. Beijing reported an uptick in cases of coronavirus and South Korea reported 100 new cases that doubled its infections. In China authorities reported 234 infections among prisoners outside Hubei province, the epicenter. The report ended 16 straight days of declines in new mainland cases excluding that province. Although daily updates on the outbreak have kept investors on edge, hopes that central banks across the globe will take measures to counter any slowdown have cushioned global stocks and kept the benchmark S&P 500 near all-time highs. A number of U.S. Federal Reserve officials are set to speak at a Friday conference. On CNBC, Atlanta Federal Reserve Bank President Raphael Bostic said the U.S. economy is set to grow at a 2.00% to 2.25% annualized rate this year and any disruption to activity from the coronavirus outbreak will be short-lived. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 5.3 basis points at 1.342% in morning trading. February 21 Friday 10:26AM New York / 1526 GMT Price Current Net Yield % Change (bps) Three-month bills 1.5375 1.569 -0.010 Six-month bills 1.4975 1.5338 -0.013 Two-year note 100-16/256 1.342 -0.053 Three-year note 100-52/256 1.3051 -0.057 Five-year note 100-82/256 1.3077 -0.062 Seven-year note 100-184/256 1.3909 -0.061 10-year note 100-92/256 1.4611 -0.064 30-year bond 102-64/256 1.9012 -0.071 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 1.25 -0.75 spread U.S. 3-year dollar swap -0.50 -0.75 spread U.S. 5-year dollar swap -2.50 -1.00 spread U.S. 10-year dollar swap -8.00 -1.50 spread U.S. 30-year dollar swap -37.25 -2.00 spread (Reporting by Ross Kerber; Editing by David Gregorio)
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