TREASURIES-Yields fall on coronavirus fears, 30-year hits all-time low

 (New throughout, updates prices, yields, market activity and
    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
    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
 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       
 U.S. 2-year dollar swap         1.25        -0.75    
 U.S. 3-year dollar swap        -0.50        -0.75    
 U.S. 5-year dollar swap        -2.50        -1.00    
 U.S. 10-year dollar swap       -8.00        -1.50    
 U.S. 30-year dollar swap      -37.25        -2.00    
 (Reporting by Ross Kerber; Editing by David Gregorio)

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