October 25, 2020

Treasury yields move higher amid coronavirus fears

U.S. government debt prices were lower on Monday morning, as U.S.-China tensions and surging coronavirus cases dented investor hopes for a swift economic recovery.

At around 1:45 a.m. ET, the yield on the benchmark 10-year Treasury note was higher at 0.5478%, recovering slightly after falling to its lowest level since March 9 on Friday. Meanwhile, the yield on the 30-year Treasury bond was up at 1.2192%. The 30-year rate slipped to its lowest level since April 29 in the previous session. Yields move inversely to prices.

The number of coronavirus cases continues to rise worldwide, with the World Health Organization reporting that the 24 hours through to Friday marked the largest ever single-day increase of new Covid-19 infections.

Almost 300,000 new cases of the virus were reported on Thursday, with more than half stemming from the Americas.

To date, more than 18 million people have contracted the coronavirus worldwide, with 689,347 related deaths, according to data compiled by Johns Hopkins University.

On the data front, a final reading of manufacturing Purchasing Managers’ Index (PMI) for July will be released at 9:45 a.m. ET. The Institute for Supply Management’s index of national factory activity for July and construction spending figures for June will follow at 10 a.m. ET.

Third-quarter senior loan officer survey data and light vehicle sales for July will be released slightly later in the session.

The U.S. Treasury will auction $54 billion of 13-week bills and $51 billion of 26-week bills on Monday.

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