(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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