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TREASURIES-Yields fall as Apple sales warning dents risk appetite

By Karen Brettell

* Apple says unlikely to meet sales guidance * Thirty-year yields lowest since September By Karen Brettell NEW YORK, Feb 18 (Reuters) - U.S. Treasury yields fell on Tuesday after Apple Inc warned that it would miss sales guidance due to manufacturing slowdowns caused by the coronavirus, denting risk appetite and increasing demand for safe-haven bonds. Apple said it was unlikely to meet the March quarter sales guidance it had set just three weeks ago. HSBC Holdings PLC also warned about the impact of the coronavirus on its Asia business. “With Apple coming out and missing sales just on the coronavirus, it continued the risk-off tone on growth concerns,” said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York. German economic data also showed the virus weighing on sentiment. The mood among German investors deteriorated far more than expected in February on worries that the coronavirus outbreak would dampen world trade. The latest data provided by China on people infected with coronavirus indicates a decline in new cases but "every scenario is still on the table" in terms of the epidemic's evolution, the World Health Organization said on Monday. Benchmark 10-year note yields fell three basis points to 1.56%. Thirty-year bond yields dropped four basis points to 2.01%. They earlier fell to 1.98%, the lowest since Sept. 5, and are approaching a record low of 1.905% set on Aug. 28. A global thirst for yield and expectations that inflation will remain tepid has increased demand for longer-dated U.S. debt and driven the U.S. yield curve flatter. February 18 Tuesday 9:16AM New York / 1416 GMT Price Current Net Yield % Change (bps) Three-month bills 1.55 1.5816 0.005 Six-month bills 1.525 1.5621 0.008 Two-year note 99-239/256 1.4096 -0.014 Three-year note 99-254/256 1.3777 -0.016 Five-year note 99-234/256 1.393 -0.021 Seven-year note 100-28/256 1.4833 -0.026 10-year note 99-116/256 1.5593 -0.029 30-year bond 99-208/256 2.0083 -0.035 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 2.50 -0.25 spread U.S. 3-year dollar swap 1.25 -0.25 spread U.S. 5-year dollar swap -1.00 0.00 spread U.S. 10-year dollar swap -5.75 0.00 spread U.S. 30-year dollar swap -33.00 0.25 spread (Reporting by Karen Brfettell; editing by Jonathan Oatis)