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TREASURIES-Yields fall as Apple sales warning dents risk appetite

By Karen Brettell

(Adds inverted yield curve, updates prices) * Apple says unlikely to meet sales guidance * 30-year yields lowest since September By Karen Brettell NEW YORK, Feb 18 (Reuters) - U.S. Treasury yields fell on Tuesday after Apple Inc's warning it would miss its sales estimate 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 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. China reported on Tuesday its fewest new coronavirus infections since January and its lowest daily death toll for a week, but the World Health Organization said data suggesting the epidemic had slowed should still be viewed with caution. Benchmark 10-year note yields fell three basis points to 1.55%. Thirty-year bond yields dropped four basis points to 2.00%. 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 have increased demand for longer-dated U.S. debt and flattened the U.S. yield curve. The curve between three-month bills and 10-year notes was inverted on Tuesday at negative two basis points. It inverted in March for the first time in over a decade, indicating that a recession is likely in the next year or two. February 18 Tuesday 2:25PM New York / 1925 GMT Price Current Net Yield % Change (bps) Three-month bills 1.5475 1.5791 0.002 Six-month bills 1.5125 1.5492 -0.005 Two-year note 99-241/256 1.4055 -0.018 Three-year note 100-4/256 1.3696 -0.024 Five-year note 99-240/256 1.3881 -0.026 Seven-year note 100-36/256 1.4786 -0.030 10-year note 99-128/256 1.5542 -0.034 30-year bond 99-232/256 2.0042 -0.039 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 2.00 -0.75 spread U.S. 3-year dollar swap 1.00 -0.50 spread U.S. 5-year dollar swap -1.25 -0.25 spread U.S. 10-year dollar swap -6.50 -0.75 spread U.S. 30-year dollar swap -34.00 -0.75 spread (Editing by Jonathan Oatis and Richard Chang)