Authorities bond yields are falling amid fears of a brand new pressure of coronavirus
Government bond yields remained unchanged on Tuesday after Congress passed a $ 900 billion Covid-19 bailout package.
The yield on the 10-year benchmark Treasury note barely changed at 0.935%, while the yield on the 30-year Treasury bond fell slightly to 1.671%. Bond yields move inversely with prices.
Congress passed a mammoth coronavirus aid and government spending package. The package includes an increase in unemployment benefits, more small business loans, an additional $ 600 in direct payment, and funding to streamline the critical distribution of Covid-19 vaccines. The bill now goes to President Donald Trump’s desk.
“Whether that is enough to avoid a double-dip recession at the beginning of the new year is the main debate. A debate that will be filed through Q1 and the high-frequency data provides context for labor market performance.” Ian Lyngen, head of US interest rates at BMO, said in a note.
On Monday, 10-year government bond yields fell below 0.9% as fears over the new Covid variant sparked demand for the relative security of government bonds.
The variant, which scientists say is up to 70% more transmissible than previous tribes, forced the UK government to shut down London and other parts of south east England and track the mix of households over the Christmas break.
It also resulted in several countries around the world closing their borders with the UK, disrupting travel and raising concerns about possible food shortages as the deadline for the Brexit transition drew near.
Meanwhile, investors are also watching coronavirus vaccines roll out. With the Pfizer BioNTech vaccine already rolled out nationwide, about 6 million doses of the Moderna vaccine were distributed on Sunday.
In terms of data, third quarter GDP numbers are expected at 8:30 a.m. ET, while consumer confidence and existing home sales are expected at 10 a.m. ET.