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TREASURIES-Yields rise on reports of coronavirus treatment, job gains

By Ross Kerber

By Ross Kerber BOSTON, Feb 5 (Reuters) - U.S Treasury yields rose on Wednesday as traders reacted to positive reports on efforts to counter the coronavirus and a strong private-sector jobs report. The benchmark 10-year yield was up 3.8 basis points in morning trading at 1.6387%. Other U.S. and European markets also reacted to early reports that a Chinese university team found a drug to treat virus victims and to UK researchers saying they made a "significant breakthrough" in finding a vaccine. "We are finally discounting the effects of the coronavirus," said Tom di Galoma, managing director of Seaport Global Holdings. He cautioned that traders' risk appetite could be coming too soon, as more is known about the epidemic's economic impact. "There might be some bad news that could play out here," he said. The World Health Organization played down media reports on Wednesday of breakthrough drugs. China said another 65 people had died as of Tuesday, the highest daily total yet, taking the overall toll on the mainland to 490, most in and around the locked-down central city of Wuhan, where the new virus emerged late last year. There have been two deaths outside mainland China - in the Philippines and Hong Kong - both following visits to Wuhan. Separately U.S. private-sector payrolls rose by 291,000 jobs in January, ADP reported on Wednesday, nearly double a forecast and the highest increase since May 2015. In addition, the early results of Iowa's Democratic presidential primary released late on Tuesday showed the moderate former South Bend, Indiana, Mayor Pete Buttigieg with a narrow lead in state delegates over progressive U.S. Senator Bernie Sanders of Vermont. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.6 basis points at 1.4411% in morning trading. February 5 Wednesday 9:44AM New York / 1444 GMT Price Current Net Yield % Change (bps) Three-month bills 1.54 1.5718 -0.002 Six-month bills 1.5275 1.565 0.000 Two-year note 99-223/256 1.4411 0.026 Three-year note 100-48/256 1.4345 0.033 Five-year note 99-154/256 1.4582 0.036 Seven-year note 99-152/256 1.5616 0.038 10-year note 101 1.6387 0.038 30-year bond 105-172/256 2.1171 0.037 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 6.00 -0.25 spread U.S. 3-year dollar swap 2.50 0.00 spread U.S. 5-year dollar swap 0.25 0.00 spread U.S. 10-year dollar swap -4.50 0.25 spread U.S. 30-year dollar swap -32.50 0.25 spread (Reporting by Ross Kerber; editing by Jonathan Oatis)