U.S. government debt prices rose Tuesday as investor sentiment was shaken by a rapidly spreading new strain of coronavirus in the UK.
The return on the benchmark 10 year treasury note fell to around 0.918% while the rate of return on the 30-year treasury bond fell to 1.656%. Bond yields move inversely with prices.
On Monday the The yield on 10-year government bonds fell below 0.9%. Fears about the new Covid variant sparked the 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.
Still, investors could find some solace in a $ 900 billion Congressional bailout package for Covid-19 and longer-term optimism about vaccine rollout worldwide.
On Monday, 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 direct payment, and funding to streamline the critical distribution of Covid-19 vaccines. The bill now goes to President Donald Trump’s desk.
Meanwhile, investors are also watching coronavirus vaccines roll out. With the Pfizer– –BioNTech With the vaccine already rolled out across the country, around 6 million doses of the Moderna vaccine were distributed on Sunday.
In terms of data, third quarter GDP numbers are due at 8:30 a.m. ET, while consumer confidence and existing home sales are expected at 10 a.m. ET.
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This article originally appeared on www.cnbc.com
