(Updates prices; adds details and investor comments)
By Noel Randewich and Ross Kerber
July 10 (Reuters) - Longer-term U.S. Treasury yields
rebounded on Friday, following Wall Street higher as optimism
about an antiviral drug to treat COVID-19 countered worries
about the economic fallout from a record rise in coronavirus
cases in the United States.
The yield on the benchmark 10-year U.S. Treasury note
rose 2.8 basis points to 0.6332%, after dipping as
low as 0.569% earlier in the session - its lowest level since
April 22.
Gilead Sciences reported that additional data from
a late-stage study showed that its antiviral drug remdesivir
significantly improved clinical recovery and reduced the risk of
death in COVID-19 patients.
"The market is trading on the expectation that the economy
is not going to shut down for a second time. It is looking past
the short term," said Andrew Richman, managing director of fixed
income at Truist/SunTrust Advisory Services.
Still, more than 60,500 new COVID-19 infections were
reported across the United States on Thursday, according to a
Reuters tally, setting a one-day record.
Robert Kaplan, president of the Federal Reserve Bank of
Dallas, in a television interview Friday said that muting the
virus' spread is key to an economic recovery, echoing similar
recent comments by other Fed policy makers.
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 48 basis points, almost 2 basis points
higher than at Thursday's close. At one point it touched 42.7
basis points, the lowest level since May 4.
The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was up less than
a basis point at 0.1549%, while the five-year yield rose 2.4
basis points to 0.2976%.
Even with Friday's reversal, the 10-year yield was down
about 5 basis points for the week.
"We are heading into the weekend, and investors may be
clearing their minds and just booking some profits in
fixed-income land," said Kevin Flanagan, head of fixed income
strategy at WisdomTree Asset Management in New York.
July 10 Friday 11:37AM New York / 1837 GMT
Price Current Net
Yield % Change
(bps)
Three-month bills 0.13 0.1322 -0.002
Six-month bills 0.1475 0.1497 -0.005
Two-year note 99-241/256 0.1549 0.004
Three-year note 99-210/256 0.1851 0.010
Five-year note 99-196/256 0.2976 0.024
Seven-year note 100-28/256 0.484 0.030
10-year note 99-236/256 0.6332 0.028
20-year bond 100-92/256 1.1048 0.021
30-year bond 98-40/256 1.325 0.016
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 6.00 0.00
spread
U.S. 3-year dollar swap 4.00 0.00
spread
U.S. 5-year dollar swap 3.25 0.00
spread
U.S. 10-year dollar swap -1.75 0.50
spread
U.S. 30-year dollar swap -46.75 1.25
spread
(Reporting by Ross Kerber in Boston and Noel Randewich in San
Francisco
Editing by Nick Zieminski and Leslie Adler)