BOSTON, Feb 12 (Reuters) - U.S. Treasury yields rose on Wednesday as investors showed a renewed appetite for risk following a reported drop in the number of new coronavirus cases in China. The benchmark 10-year yield was up 3.8 basis points in midday trading at 1.6282%. Investors moving away from bonds who bid up other assets, including U.S. stocks, were also encouraged by the latest quarterly earning reports. "There seems to be better risk appetite," said John Briggs, head of strategy, Americas, at NatWest Markets. Wednesday's trading, he said, reflects "a removal of the flight-to-quality" seen in recent days. Briggs said Treasury markets were likely not affected by comments from U.S. Federal Reserve chairman Jerome Powell, who on Wednesday reiterated his confidence in the sustainability of the record-long U.S. economic expansion. "Theres no reason why the current situation of low unemployment, rising wages, high job creation - theres no reason why it cant go on," Powell told the Senate Banking Committee in his second day of congressional testimony.
China on Wednesday reported its lowest number of new coronavirus cases since January, lending weight to a prediction April. However, it was still unclear to what extent economic growth would take a hit from the virus, which has killed more than 1,100 people, shuttered businesses in China and briefly disputed global stock market rally in the past weeks.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.3 basis points at 1.4397% in midday trading.
February 12 Wednesday 12:37PM New York / 1737 GMTPrice Current NetYield % Change
(bps)Three-month bills 1.545 1.5769 -0.002Six-month bills 1.52 1.5573 0.007Two-year note 99-224/256 1.4397 0.023Three-year note 99-224/256 1.4178 0.027Five-year note 99-172/256 1.4437 0.035Seven-year note 99-180/256 1.5451 0.03610-year note 101-24/256 1.6282 0.03830-year bond 106-80/256 2.089 0.037
DOLLAR SWAP SPREADSLast (bps) Net
Change (bps)U.S. 2-year dollar swap 4.25 1.25
spreadU.S. 3-year dollar swap 2.50 2.00
spreadU.S. 5-year dollar swap 0.50 1.25
spreadU.S. 10-year dollar swap -4.75 1.25
spreadU.S. 30-year dollar swap -32.50 1.00
(Reporting by Ross Kerber; editing by Jonathan Oatis)