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TREASURIES-U.S. Treasuries rally as coronavirus impacts spread

By Karen Pierog

By Karen Pierog NEW YORK, March 5 (Reuters) - U.S. Treasuries rallied on Thursday as the market weighed the implications of increasing coronavirus quarantines on the global economy. The 10-year Treasury yield has fallen in 10 of the last 11 sessions, slipping below 1% for the first time ever on Tuesday after the Federal Reserve cut interest rates by 50 basis points in response to the virus' widening impact. Yields on two-year notes fell to their lowest in nearly four years. Jim Vogel, senior interest rate strategist at FHN Financial in Memphis, attributed the bond rally to more corporations ordering workers to stay at home and not travel. "That's another element people are trying to process through the market," he said, adding that while the virus was initially seen as affecting supplies of goods, it now could reduce demand as well. Amazon.com Inc and Facebook Inc on Thursday joined Microsoft Corp in recommending employees in the Seattle area to work from home after several people in the region were infected with the coronavirus. Globally, there have been over 95,300 cases and more than 3,200 deaths, according to a Reuters tally. In late morning trading, U.S. 10-year yields fell to 0.931% from 0.992% late on Wednesday. Yields on U.S. 30-year bonds were at 1.585%, down from 1.636% on Wednesday. They touched an all-time trough of 1.507% on Tuesday. U.S. 2-year yields were last at 0.581%, after hitting 0.554%, the lowest since July 2016. Ahead of Friday's release of the February employment report, the number of Americans filing for unemployment benefits fell last week, suggesting the labor market was on solid footing despite the coronavirus outbreak. March 5 Thursday 10:53AM New York /1553 GMT Price Current Net Yield % Change (bps) Three-month bills 0.68 0.6925 -0.013 Six-month bills 0.555 0.5643 -0.100 Two-year note 101-17/256 0.5835 -0.055 Three-year note 102-56/256 0.6136 -0.043 Five-year note 102-48/256 0.6779 -0.051 Seven-year note 102-10/256 0.8239 -0.056 10-year note 105-100/256 0.9312 -0.061 30-year bond 109-212/256 1.5864 -0.050 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.00 2.50 spread U.S. 3-year dollar swap 6.50 1.25 spread U.S. 5-year dollar swap 6.50 0.75 spread U.S. 10-year dollar swap -0.75 0.25 spread U.S. 30-year dollar swap -41.00 -1.00 spread (Reporting by Karen Pierog; Additional reporting by Gertrude Chavez-Dreyfuss; Editing by Richard Chang)