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TREASURIES-U.S. yields slide for 4th day on U.S.-China trade worries

Gertrude Chavez-Dreyfuss

(Adds comment, updates prices)

* U.S. 30-year yields fall to one-month low

* U.S. 2-year, 10-year note yields decline to one-week low

* U.S. yields tracking European market

NEW YORK, Feb 8 (Reuters) - U.S. Treasury yields fell for a fourth straight session on Friday, pressured by global equity market losses on concerns there would be no trade deal between the United States and China by the March 1 deadline. U.S. 30-year yields dropped to one-month lows, while those on two-year and 10-year notes slid to one-week troughs. "This is partially from an equity sell-off that has been a little bit of a risk-off trade," said Ellis Phifer, fixed-income strategist at Raymond James in Memphis, Tennessee. "We have the China trade talks, but we haven't really seen success at this point. Suddenly the bond market is taking its clues from that." U.S. President Donald Trump said on Thursday he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal. A person briefed on the talks said Trump's advisers were concerned that accepting a meeting invitation at this stage would raise unfounded expectations for a quick deal and erode U.S. leverage in the talks, where the two sides remain far apart on core structural intellectual property issues. In afternoon trading, U.S. 10-year note yields fell to 2.632 percent, from 2.654 percent late on Thursday. U.S. 30-year bond yields were also down, at 2.973 percent , from 3.006 percent on Thursday. Thirty-year yields earlier fell to a one-month low of 2.971 percent. On the short end of the curve, U.S. 2-year yields slipped to 2.463 percent, compared with Thursday's 2.479 percent . "The bullish undertones despite back-to-back weeks of coupon supply serve to increase momentum toward lower yields across a variety of tenors," said BMO Capital Markets in a research note. The bank noted that it is closely watching the 2.618 percent level in the 10-year yield as a key near-term test. But with the next nominal benchmark debt issuance not until Feb. 25, BMO said the "lack of reintroduction of additional supply offers another support for our long bias." U.S. yields were also tracking those on Germany's 10-year government bonds, which dropped below 0.1 percent for the first time since late 2016 on Friday, reflecting concerns about economic conditions in the euro zone's largest economy.

The 10-year Bund yield fell as low as 0.097 percent , dragging French and Dutch yields to their lowest levels in more than two years,.

February 8 Friday 3:25PM New York / 2025 GMT

Price Current NetYield % Change

(bps)

Three-month bills 2.375 2.4219 0.010Six-month bills 2.4325 2.4963 0.010Two-year note 100-17/256 2.465 -0.014Three-year note 100-46/256 2.4375 -0.013Five-year note 100-70/256 2.4412 -0.017Seven-year note 100-156/256 2.529 -0.01610-year note 99-240/256 2.6321 -0.02230-year bond 100-140/256 2.9723 -0.034

DOLLAR SWAP SPREADS

Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 14.00 0.00

spread

U.S. 3-year dollar swap 10.75 -0.25

spread

U.S. 5-year dollar swap 8.75 -0.25

spread

U.S. 10-year dollar swap 2.25 0.00

spread

U.S. 30-year dollar swap -18.75 0.00

spread

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler and Sonya Hepinstall)