(Updates market activity) By Ross Kerber BOSTON, March 20 (Reuters) - U.S. Treasury yields fell on Friday as an order for New York state residents to stay at home reinforced concerns about the economic impact of the coronavirus pandemic, and the Federal Reserve stepped in with measures aimed at boosting liquidity. The yield on the benchmark 10-year note was down 24.4 basis points at 0.8853%, with a 43-basis-point swing in the yield during the session continuing the volatility that marked trading this week. The movement left a closely watched part of the U.S. yield curve, the gap between the 2-year and 10-year notes , at 55 basis points, 8 basis points lower than its close on Thursday but still at a level not seen until recently since 2018. New York Governor Andrew Cuomo's announcement that he would issue an executive order mandating that 100% of the state's non-essential workforce stay home and all non-essential businesses close contributed to the afternoon Treasuries buying, analysts said. California and Illinois have also ordered people to stay home. Zhiwei Ren, managing director and portfolio manager for Penn Mutual Asset Management, said the stay-at-home orders likely were seen as disruptive by keeping financial teams apart. Priya Misra, head of global rates strategy for TD Securities, said investors also seemed to react to operations by the Fed to stabilize the financial system. Late on Friday the New York Fed posted a schedule indicating it would buy more than $70 billion worth of Treasury securities on Monday, a relatively large amount that Misra said was meant to send a strong message the Fed would act as necessary to keep markets functioning. "They are serious here," she said. Separately, the New York Fed on Friday accepted a total of $67 billion in bids in repurchase agreement operations, according to its website. Major U.S. stock indexes closed down about 4% on Friday, which Misra said also made it likely investors were buying safer-seeming Treasuries ahead of the weekend. Andrew Richman, managing director of fixed income at Truist/SunTrust Advisory Services, said that although actions by the Fed and other parts of the U.S. government seemed to be keeping the financial system liquid, there was little cause for short-term optimism. The yield on the 3-month Treasury bill remained close to zero, and Richman and others said that while the 10-year yield was higher than last week, it was still at a relatively low level. Together, the numbers are "telling us that we'll have negative growth and the Fed will be at virtually zero for a long time," Richman said. March 20 Friday 5:18PM New York / 2118 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0475 0.0483 -0.015 Six-month bills 0.04 0.0406 -0.005 Two-year note 101-139/256 0.3254 -0.096 Three-year note 100-86/256 0.3865 -0.142 Five-year note 103-36/256 0.4806 -0.173 Seven-year note 102-104/256 0.7681 -0.223 10-year note 105-208/256 0.8853 -0.244 30-year bond 112-180/256 1.4731 -0.278 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 19.75 2.25 spread U.S. 3-year dollar swap 13.25 4.75 spread U.S. 5-year dollar swap 8.00 2.00 spread U.S. 10-year dollar swap -8.75 6.75 spread U.S. 30-year dollar swap -64.50 12.00 spread (Reporting by Ross Kerber; Editing by Dan Grebler and Leslie Adler)
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