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U.S. Treasury yields slid Thursday as investors snapped up bonds in response to the worsening COVID-19 trajectory, prompting local measures by city and state governments to combat its spread.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.884% fell 10.2 basis points to 0.885%. The 2-year note rate TMUBMUSD02Y, 0.176% edged 0.6 basis point lower to 0.177%, while the 30-year bond yield TMUBMUSD30Y, 1.644% slid 10.8 basis points to 1.651%, marking its biggest daily drop since June 11.
What’s driving Treasurys?
Coronavirus concerns were front and center as cases hit new daily records in the U.S., Europe and in other economies. New York state and Chicago imposed new restrictions on business and social activity to thwart the deepening pandemic.
The U.S. counted a record of 142,755 cases on Wednesday, and at least 1,431 people died, according to a New York Times tracker. In the past week, the U.S. has recorded a daily average of 128,081 cases, up nearly 70% from the average two weeks ago.
Unease around the virus dulled some of the earlier optimism around therapies for the deadly disease, even as the health-care industry makes progress toward a viable vaccine. Pfizer and BioNTech said Monday that their vaccine candidate for COVID-19 was 90% effective at preventing the virus in a late-stage trial.
Federal Reserve Chairman Jerome Powell said on Thursday that a coronavirus vaccine wouldn’t solve the immediate risks facing the economy.
U.S. economic data pointed to a steady recovery in the labor market. Initial jobless benefit claims fell 48,000 to 709,000 in early November. Meanwhile, continuing jobless claims dropped 436,000 to 6.79 million.
U.S. consumer prices were unchanged for October.
The Treasury Department held its last auction of the week, with $27 billion of 30-year bonds going on the block.
What did market participants say?
“It’s getting harder to escape the pandemic numbers in the U.S. and Europe. Vaccine news is still a powerful market influence, but its near-term power peaked on Tuesday,” said Jim Vogel, an interest-rate strategist at FHN Financial.
