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TREASURIES-Yields tumble after jobless claims, retail sales data

By Karen Pierog CHICAGO, April 15 (Reuters) - U.S. Treasury yields fell on Thursday despite better-than-expected March retail sales data and a bigger-than-projected drop in initial jobless claims, as the economy fueled by the COVID-19 vaccine rollout and fiscal stimulus continued to rev up. The benchmark 10-year yield slipped below 1.6% for the first time since March 25. It was last down 5.1 basis points at 1.5848%. Retail sales increased 9.8% last month, the Commerce Department said on Thursday. Data for February was revised higher to show sales dropping 2.7% instead of 3.0% as previously reported. Economists polled by Reuters had forecast retail sales increasing 5.9% in March. Initial claims for state unemployment benefits totaled a seasonally adjusted 576,000 for the week ended April 10 compared to 769,000 in the prior week. Economists polled by Reuters had forecast 700,000 applications in the latest week. "From a pure market move based on traditional fundamentals, this is a little perplexing," said Anders Persson, chief investment officer of global fixed income at Nuveen, referring to the fall in Treasury yields. Technical factors may be in play such as increased buying of Treasuries out of Japan and eased supply fears after the market successfully digested $120 billion of bonds and notes earlier this week, he added. He also noted that yields had climbed steeply with the 10-year reaching a 14-month high of 1.776% on March 30. "From our perceptive, it felt like the market was moving a little too quickly in terms of yield moves and inflation fears we have felt all along have been a little bit overdone," Persson said. The two-year Treasury yield, which typically moves in step with interest rate expectations, was last less than a basis point lower at 0.161%. A closely watched part of the yield curve that measures the gap between yields on two- and 10-year Treasury notes was last 4.20 basis points flatter at 142.73 basis points. April 15 Thursday 9:48AM New York / 1348 GMT Price Current Net Yield % Change (bps) Three-month bills 0.02 0.0203 0.000 Six-month bills 0.04 0.0406 0.000 Two-year note 99-238/256 0.161 -0.002 Three-year note 100-24/256 0.3435 -0.016 Five-year note 99-160/256 0.8274 -0.033 Seven-year note 99-236/256 1.2617 -0.047 10-year note 95-212/256 1.5848 -0.051 20-year bond 95-132/256 2.1539 -0.069 30-year bond 91-220/256 2.2511 -0.073 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 11.00 -0.50 spread U.S. 3-year dollar swap 11.50 -0.50 spread U.S. 5-year dollar swap 8.00 -0.50 spread U.S. 10-year dollar swap -2.50 -1.25 spread U.S. 30-year dollar swap -28.75 -1.00 spread (By Karen Pierog Editing by Alexandra Hudson)