U.S. Treasury yields were down in early trade Monday after a new and more virulent strain of COVID-19 was reported in the U.K., precipitating further lockdowns across the country.
What are Treasurys doing?
The 10-year Treasury note yield
fell 4.3 basis points to 0.905%, while the 2-year note rate
edged down 0.6 basis point to 0.117%. The 30-year bond yield
slid 5.6 basis points to 1.643%.
What’s driving Treasurys?
Equities tumbled and haven assets rallied after a more transmissible COVID-19 strain was discovered in the southeast of the U.K. Countries across the European Union implemented bans against inbound flights from the U.K., while additional lockdown measures were put in place over the weekend.
That has offset some of the medium-term optimism around the deployment of vaccines, with the U.S. looking to push for rapid distribution in the next few months.
Lawmakers in Washington are set to pass a coronavirus economic relief package soon. Congress is expected to vote on Monday on the $900 billion aid bill.
Later, the Treasury Department will offload $24 billion of 20-year notes in the afternoon.
What did market participants’ say?
“Treasuries have traded well with a global ‘risk-off’ tone on COVID namely the new strain in the UK,” said Justin Lederer, an interest-rate strategist at Cantor Fitzgerald.