Bonds

Treasury yields fall after surge in reported coronavirus cases

Treasury yields fell on Thursday, following a sharp rise in the reported number of new coronavirus deaths.

Treasurys

The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.5763%, while the yield on the 30-year Treasury bond was also lower at around 2.0449%.

Market focus is largely attuned to China's fast-spreading coronavirus, as investors continue to assess the potential economic fallout of the outbreak.

China confirmed 15,152 new cases of the flu-like virus on Thursday, with 254 additional deaths. That brings the country's total death toll to 1,367 as the number of people infected hit 59,804, according to the government.

"A 15,000 person spike in coronavirus infections in Hubei province was more than sufficient to drive a modest global flight-to-quality, pushing 10-year yields back below 1.60%," Ian Lyngen, BMO's head of U.S. rates, said in a note Thursday.

Yields remained lower on Thursday after economic data showed tame inflation and a steady labor market. 

Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 205,000 for the week ended Feb. 8, the Labor Department said on Thursday. Claims fell in the prior week to 203,000, which was the lowest reading since November.

The consumer price index for January increased 0.1%, versus a 0.2% gain expected, according to Dow Jones.

Earlier in the week, Federal Reserve Chairman Jerome Powell said the U.S. central bank was "closely monitoring" the coronavirus, its impact on China and the effect it could have on global economic growth.

Dallas Fed President Robert Kaplan and New York Fed President John Williams will both comment on the world's largest economy at separate events later in the session.

The U.S. Treasury is set to auction $50 billion in four-week bills, $45 billion in eight-week bills and $19 billion in 30-year bonds on Thursday.