TREASURIES-Investors disregard grim jobs report, again

 (Updates with market activity)
    By Ross Kerber
    BOSTON, April 3 (Reuters) - U.S. Treasury yields held steady
on Friday despite a grim federal jobs report, in a replay of a
similar dynamic from the day before, as investors tried to grasp
the full impact of the COVID-19 pandemic caused by the new
    The yield on the benchmark U.S. 10-year note was
down 5.6 basis points at 0.5714% in afternoon trading. 
    That was close to where it stood at 8:30 a.m. EDT (1230 GMT)
when a closely watched U.S. Labor Department report showed the
American economy shed 701,000 jobs in March. The figure signaled
the abrupt end of a historic 113 straight months of employment
growth as stringent measures to control the novel coronavirus
outbreak shuttered businesses and factories, confirming a
recession is under way.
    For Treasuries, the trading echoed that of Thursday when 
investors also disregarded a record rise in jobless claims to
more than 6 million.
   Analysts said the muted market reaction to the dramatic jobs
reports reinforced how investors are focused more on measures of
public health and the effectiveness of government responses.
    "This is the smallest market impact I’ve ever seen from the
payrolls number," said Justin Lederer, Treasury analyst for
Cantor Fitzgerald.
    "This data doesn't mean that much, until we get a better
picture of how the whole situation plays out," he said.
    Wall Street's main indexes fell on Friday.
    A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at 36.7 basis points, less than a basis point
lower than at Thursday's close.
    The two-year  U.S. Treasury yield, which
typically moves in step with interest rate expectations, was
down 1.3 basis points at 0.2072% in afternoon trading.
    Since Wednesday, the figure several times dropped close to
0.20%, a level last reached in 2013, as analysts judge it 
unlikely the Fed will raise interest rates anytime soon.
    The 10-year note's yield was also within sight of its
all-time low of 0.318% reached on March 9, and far below the
levels near 2% seen at the start of the year. 
    With bond yields so low, dividend-paying stocks are getting
a fresh look from investors. 
      April 3 Friday 2:02PM New York / 1802 GMT
 US T BONDS JUN0               182-29/32    1-12/32   
 10YR TNotes JUN0              139-72/256   0-100/25  
                               Price        Current   Net
                                            Yield %   Change
 Three-month bills             0.1          0.1017    0.006
 Six-month bills               0.1475       0.1497    0.000
 Two-year note                 100-85/256   0.2072    -0.013
 Three-year note               100-176/256  0.2651    -0.014
 Five-year note                100-184/256  0.3544    -0.034
 Seven-year note               100-242/256  0.4872    -0.049
 10-year note                  108-228/256  0.5714    -0.056
 30-year bond                  120-8/256    1.1998    -0.068
   DOLLAR SWAP SPREADS                                
                               Last (bps)   Net       
 U.S. 2-year dollar swap        24.50         1.50    
 U.S. 3-year dollar swap        15.75         0.75    
 U.S. 5-year dollar swap        11.75         0.50    
 U.S. 10-year dollar swap        4.75        -0.25    
 U.S. 30-year dollar swap      -43.25        -2.00    

 (Reporting by Ross Kerber; editing by Jonathan Oatis)

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