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U.S. Treasury yields fell early Monday as a global stock-market selloff bolstered demand for haven assets such as government bonds, amid renewed worries over the spread of COVID-19.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.654% fell 3 basis points to 0.664%, while the 2-year note rate TMUBMUSD02Y, 0.137% was steady at 0.137%. The 30-year bond yield TMUBMUSD30Y, 1.400% slipped 4.7 basis points to 1.405%. Bond prices move inversely to yields.
What’s driving Treasurys?
U.S. stocks were set to open sharply lower to start the week amid worries the rising COVID-19 case tally in Europe would prompt governments to re-implement bruising lockdowns. London Mayor Sadiq Khan was in talks to introduce new restrictions to stem the spread of the coronavirus.
At the same time, politicians in Europe are looking to avoid to put in place the economically devastating restrictions on social activity akin to those in March when the coronavirus spread rapidly across the continent.
Analysts say new lockdowns would deliver a blow to hopes of a steady global economic recovery, without which higher interest rates seems unlikely.
The Stoxx Europe 600 index SXXP, -2.73% was down 2.8%, while futures for the S&P 500 SPX, -1.11% were lower by 1.5%.
The day is packed with speeches from senior Federal Reserve officials, including Dallas Fed President Robert Kaplan, Chicago Fed President Charles Evans, and New York Fed President John Williams.
What did market participants’ say?
“ With coronavirus cases having surpassed the 31 million mark and almost 1 million deaths globally, the possibility that ‘second waves’ or indeed, first waves that were never actually brought under control will continue to weigh on the economic and policy outlook is all but certain,” said analysts at Rabobank.
