Wires

TREASURIES-US Treasury yields hit new lows on coronavirus fears, oil plunge

(Adds strategist comment, updates yields) NEW YORK, March 9 (Reuters) - U.S. 10-year Treasury yields slid to a record low on Monday as coronavirus panic gripped world markets and stoked fears that the world economy is headed for a recession. As global share markets tumbled, investors fled headlong to bonds to hedge the economic trauma of the coronavirus, and oil plunged more than 30% after Saudi Arabia opened the taps in a price war with Russia. The U.S. 10-year Treasury yield fell to as low as 0.318% . It was last down 27 basis points at 0.438%. Thirty-year Treasury yields were last down 35 basis points on the day, having hit a new record low at 0.70% as investors bet the Federal Reserve would be forced to cut interest rates by at least 75 basis points at its March 18 meeting, despite having only just delivered an emergency easing last week. "There's an obvious panic-buying spree in place and, as with every panic buying spree, there is no way to guess where it stops," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia. Consumer confidence in the economy has "gone from moderately positive to disastrously negative in an extremely short period," he added. Still, with savings rates high and corporate balance sheets healthy, if there is an economic downturn it will not be particularly deep or long lived, according to LeBas. Two-year note yields tumbled to 0.251%, their lowest since October 2014. They have fallen for 13 straight sessions. As two-year U.S. note yields neared 0%, shorter-dated yields on British gilts turned negative for the first time . Five-year Treasury yields dropped to a record low at 0.312% . World stock markets and oil prices tanked, and Wall Street followed suit in early morning trading, with the Dow Jones Industrial Average down 7.3% percent and the S&P 500 index Sdown 7.0%. "The Treasury moves are quite striking; the market is struggling to find an equilibrium for Treasuries, the most liquid asset around," Commerzbank rates strategist Rainer Guntermann said.

March 9 Monday 9:25AM New York / 1325 GMT

Price Current Net ChangeYield % (bps)Three-month bills 0.2825 0.2874 -0.188Six-month bills 0.25 0.2538 -0.150Two-year note 101-165/256 0.2884 -0.189Three-year note 103-20/256 0.3201 -0.188Five-year note 103-198/256 0.3587 -0.195Seven-year note 104-224/256 0.415 -0.24710-year note 110-80/256 0.438 -0.26930-year bond 129-216/256 0.8661 -0.349

DOLLAR SWAP SPREADS

Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 18.25 5.50

spread

U.S. 3-year dollar swap 15.75 5.25

spread

U.S. 5-year dollar swap 15.00 4.25

spread

U.S. 10-year dollar swap 12.25 6.25

spread

U.S. 30-year dollar swap -30.25 6.50

spread

(Reporting by Karen Brettell in New York, Karen Pierog in Chicago and Dhara Ranasinghe in London; Editing by Alex Richardson, Ed Osmond and Jonathan Oatis)

Related Tags