(Adds open of U.S. market, fresh prices) By Herbert Lash NEW YORK, Sept 20 - U.S. Treasury yields fell on Monday as fears that property developer China Evergrande Group might default deepened a global equity sell-off and sent investors scurrying to shelter in safe-haven bonds. Treasury prices rallied, pushing yields on the benchmark 10-year note down 6 basis points to 1.306% at one point, before shedding some price gains to trade at 1.3226%. Shares in Evergrande plunged as much as 19% to more than 11-year lows, raising concerns about the health of China"s economy and its potential impact on other markets. Evergrande has been scrambling to raise funds to pay its lenders, suppliers and investors, with regulators warning that its $305 billion of liabilities could spark broader risks to the financial system if not stabilised. But the severity of the risk Evergrande poses may be overblown as many people outside of China were unfamiliar with the company"s problems before last week, said Tom Simons, money market economist at Jefferies LLC. "Evergrande, frankly, to me feels more like a topic of conservation than a salient market risk," Simons said. "At the end of the day, China is not going to allow this to spiral out of control." The 30-year Treasury bond yield dropped 4.8 basis points to 1.8605%. The 10-year yield on Friday hit two-month highs as investors anticipated major central banks would start providing clues about tapering during a busy week for policy-setters, including the Federal Reserve"s two-day meeting starting Tuesday. Analysts expect the Fed to open the door to reducing its monthly bond purchases while tying any actual change to U.S. job growth. "In order to get a November announcement, there probably needs to be a hint of that in the statement that’s coming out this week," Simons said. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, fell 1.0 basis point to 0.2158%. September 20 Monday 10:43AM New York / 1443 GMT Price Current Net Yield % Change (bps) Three-month bills 0.04 0.0406 0.003 Six-month bills 0.045 0.0456 0.000 Two-year note 99-211/256 0.2158 -0.010 Three-year note 99-194/256 0.4568 -0.016 Five-year note 99-158/256 0.8292 -0.037 Seven-year note 100 1.125 -0.042 10-year note 99-84/256 1.3226 -0.047 20-year bond 99-8/256 1.8081 -0.048 30-year bond 103-48/256 1.8605 -0.049 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 10.75 0.00 spread U.S. 3-year dollar swap 12.00 0.00 spread U.S. 5-year dollar swap 10.25 -0.25 spread U.S. 10-year dollar swap 3.50 -0.50 spread U.S. 30-year dollar swap -23.25 -0.25 spread (Reporting by Herbert Lash, additional reporting by Stefano Rebaudo in London; Editing by Dhara Ranasinghe and Lisa Shumaker)