(Adds data, quote, updates prices) By Karen Brettell NEW YORK, Aug 16 (Reuters) - U.S. Treasury yields fell on Monday as weak Chinese economic data and concerns about the Taliban victory in Afghanistan and new COVID variants increased demand for the safe-haven bonds. China"s factory output and retail sales growth slowed sharply and missed expectations in July, while concerns about global risks grew after Taliban insurgents seized the Afghan capital Kabul and declared the war against foreign and local forces over. The developments in Afghanistan mean “chaos for 38 million situated between Pakistan and Iran (and) further destabilizes a world still giving ground to the pandemic,” Jim Vogel, an interest rate strategist at FHN Financial, said in a report. The continued spread of new COVID-19 variants is also adding doubts that the economy will return to normal anytime soon. “The primary driver of the outright level of US rates is the path out of the pandemic. At a minimum, the rise of delta variant cases in the US has introduced enough uncertainty as to further delay the resumption of business in the paradigm of the new normal,” analysts at BMO Capital Markets said in a note. The New York Federal Reserve said on Monday its barometer of manufacturing business activity in New York state declined more than expected in August as shipments growth nearly stalled and new orders grew at a much softer pace than a month earlier. Benchmark 10-year yields fell four basis points to 1.256%, after earlier getting as low as 1.223%. The yield curve between two-year and 10-year notes flattened two basis points to 105 basis points. Investors are also focused on minutes from the Federal Reserve’s July meeting due on Wednesday, which will be scoured for any new insight into when the U.S. central bank is likely to begin paring bond purchases. Fed Chair Jerome Powell told reporters after the meeting that he wants to see “strong job numbers” in the coming months before tapering purchases. The Fed is seen as most likely to announce the change at its December meeting, though some analysts and investors have warned that it may happen sooner. Powell may also drop hints on when a taper is likely when he speaks at the Fed’s annual economic symposium at Jackson Hole, Wyoming, next week, though he is not expected to announce a policy change then. “It’s not an official policy meeting, it’s not something that has been really used to make announcements about policy changes in the past,” said Tom Simons, a money market economist at Jefferies in New York. The Treasury will sell $27 billion in 20-year bonds on Wednesday and $8 billion in 30-year Treasury Inflation-Protected Securities (TIPS) on Thursday. August 16 Monday 3:55PM New York / 1955 GMT Price Current Net Yield % Change (bps) Three-month bills 0.065 0.0659 0.013 Six-month bills 0.0475 0.0482 -0.003 Two-year note 99-215/256 0.2072 -0.008 Three-year note 99-224/256 0.417 -0.021 Five-year note 99-98/256 0.7522 -0.036 Seven-year note 99-196/256 1.035 -0.042 10-year note 99-240/256 1.2567 -0.040 20-year bond 107-32/256 1.8188 -0.025 30-year bond 101-188/256 1.9236 -0.024 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.75 0.00 spread U.S. 3-year dollar swap 9.50 -0.25 spread U.S. 5-year dollar swap 8.00 -0.25 spread U.S. 10-year dollar swap 0.25 0.00 spread U.S. 30-year dollar swap -30.75 -0.75 spread (Editing by Mark Heinrich) Our Standards: The Thomson Reuters Trust Principles.