TREASURIES-Yields rise, but stay in tight range as investors weigh COVID risks

 (Adds data, Treasury statement, updates prices)
    By Karen Brettell
    NEW YORK, July 17 (Reuters) - U.S. Treasury yields rose on
Friday as investors weighed the prospect of new economic damage
from shutdowns meant to stem the spread of COVID-19 against the
possibility that the worst has passed.
    The United States shattered its daily record for coronavirus
infections on Thursday, reporting more than 77,000 new cases as
the number of deaths in a 24-hour period rose by nearly 1,000,
according to a Reuters tally.
    But risk appetite remains strong and stocks rose on Friday
on optimism about an economic recovery.
    Treasuries are "taking cues from COVID headlines and
equities, but its not exactly one for one," said Justin Lederer,
an interest rate strategist at Cantor Fitzgerald in New York.
"On the backups there's buyers, but we're not really breaking
out of any ranges here."
    The yield on benchmark 10-year notes rose two
basis points to 0.628%. The yield has held in a tight range from
0.569% to 0.784% since mid-June.
    The yield curve between two-year and 10-year notes
 steepened one basis point to 48 basis points.
    Data on Friday showed that U.S. homebuilding increased in
June by the most in nearly four years amid reports of rising
demand for housing in suburbs and rural areas as companies
allowed employees to work from home during the COVID-19
pandemic.
    But a resurgence in new coronavirus infections across the
country eroded consumer sentiment in mid-July, other data showed
on Friday, threatening the nascent housing and economic
recovery.
    The Treasury Department will sell $17 billion in 20-year
bonds and $14 billion in 10-year Treasury-Inflation Protected
Securities (TIPS) next week.
    TIPS have rallied for the past few months on expectations
that stimulus from the U.S. government and Federal Reserve will
spur inflation.
    Yields on 10-year TIPS fell to minus 0.84% on
Friday. They have dropped from around minus 0.40% in early June.
    The U.S. Treasury said on Friday it has asked primary
dealers for their input on whether it should make technical
adjustments to its Treasury note and bond auction schedules in
light of the massive run up in debt issuance to pay for COVID-19
emergency relief programs.

    July 17 Friday 3:00PM New York / 1900 GMT
                               Price                  
 US T BONDS SEP0               179-24/32    -0-15/32  
 10YR TNotes SEP0              139-96/256   -0-28/25  
                                            6         
                               Price        Current   Net
                                            Yield %   Change
                                                      (bps)
 Three-month bills             0.115        0.1166    0.003
 Six-month bills               0.13         0.1319    0.000
 Two-year note                 99-245/256   0.1471    0.000
 Three-year note               99-218/256   0.1748    0.003
 Five-year note                99-216/256   0.2818    0.007
 Seven-year note               100-56/256   0.4679    0.011
 10-year note                  99-248/256   0.6283    0.016
 20-year bond                  100-92/256   1.1047    0.026
 30-year bond                  98-20/256    1.3282    0.027
                                                      
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
                                            Change    
                                            (bps)     
 U.S. 2-year dollar swap         7.50         0.25    
 spread                                               
 U.S. 3-year dollar swap         5.50         0.00    
 spread                                               
 U.S. 5-year dollar swap         3.75         0.00    
 spread                                               
 U.S. 10-year dollar swap       -1.75         0.25    
 spread                                               
 U.S. 30-year dollar swap      -46.00         0.25    
 spread                                               
                                                      
 
 (Reporting by Karen Brettell; editing by Jonathan Oatis and
Richard Chang)
  

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