(Updates with market activity, analyst comment, Washington development) By Ross Kerber BOSTON, April 23 (Reuters) - Longer-term U.S. Treasury yields were slightly lower on Thursday as investors set aside the latest grim jobs report to focus on how quickly the U.S. economy might reopen amid the coronavirus pandemic. The benchmark 10-year yield was down 1.8 basis points at 0.6015%, with shorter-term yields still positive. That was even though the Labor Department said 4.427 million more people applied for unemployment benefits for the first time last week, bringing the number of Americans seeking such benefits over the past five weeks to a record 26 million people. Traditionally such poor data would send investors rushing to buy safety assets like government bonds, driving down their yields further. But amid the broad economic collapse brought on by the outbreak, investors are much more focused on questions like the strength of measures taken by officials toward reopening businesses, such as effective testing and medicines, said Priya Misra, head of global rates strategy for TD Securities. "The market is ignoring all the weak data so far, it's priced in," Misra said. "We have moved ahead from the second quarter being awful, it's the third and fourth quarter outlook" on which investors are focused, she said. The U.S. House of Representatives returned to Washington on Thursday to pass a $484 billion coronavirus relief bill, funding small businesses and hospitals and pushing the total spending response to the crisis to an unprecedented nearly $3 trillion. A bit of drama at midday came when longer-term yields fell further as stock indexes pared gains, on a disputed report that a experimental coronavirus drug flopped in an early trial. The yield on the 30-year bond fell as low as 1.168% before recovering. "The midday catalyst was equity weakness," said Guy LeBas, chief fixed income strategist for Janney Montgomery Scott LLC. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 37 basis points, about a basis point higher than at Wednesday's close. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 1 basis point at 0.2211% in afternoon trading. April 23 Thursday 2:09PM New York / 1809 GMT Price US T BONDS JUN0 181-23/32 0-24/32 10YR TNotes JUN0 139-28/256 0-16/256 Price Current Net Yield % Change (bps) Three-month bills 0.1125 0.1144 0.010 Six-month bills 0.1425 0.1446 0.003 Two-year note 100-76/256 0.2211 0.010 Three-year note 99-242/256 0.2685 0.011 Five-year note 100-166/256 0.3673 0.003 Seven-year note 100-204/256 0.5079 -0.005 10-year note 108-140/256 0.6015 -0.018 30-year bond 120-120/256 1.1831 -0.037 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 17.25 -1.50 spread U.S. 3-year dollar swap 11.25 -1.50 spread U.S. 5-year dollar swap 7.75 -1.50 spread U.S. 10-year dollar swap 3.50 -1.25 spread U.S. 30-year dollar swap -40.75 -1.50 spread (Reporting by Ross Kerber in Boston; editing by Diane Craft)
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