U.S. Treasury yields fell Thursday as investors eyed how government officials and policy makers were implementing new restrictions on social and business activity to stem the spread of COVID-19.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.844% fell 2.6 basis points to 0.854%. The 2-year note rate TMUBMUSD02Y, 0.161% edged 0.6 basis point down to 0.169%, while the 30-year bond yield TMUBMUSD30Y, 1.570% slipped 4.1 basis points to 1.577%. All three maturities dropped to their lowest levels in around two weeks. Yields and debt prices move in opposite directions.
What’s driving Treasurys?
The battle against the COVID-19 pandemic remained in focus, with more cities and states calling for limits on daily activities. New York City announced schools would be closed starting from Thursday, after hitting a key threshold for new coronavirus cases.
The tide of worsening news from the pandemic has offset the optimism around vaccine development. AstraZeneca’s experimental vaccine, developed with the University of Oxford, produced a robust immune response in older adults, based on data from Phase 2 trials.
Investors were busy sifting through a rush of economic data. First-time applications for jobless claims climbed 31,000 to 742,000 in mid-November, its first increase in five weeks. Meanwhile, continuing claims fell 429,000 to 6.37 million.
Existing home sales for October rose 4.3% from September to a seasonally-adjusted annual rate of 6.85 million. The Conference Board’s leading economic index rose 0.7% last month, following an increase of 0.7% in September.
What did market participants say?
“The push and pull from positive vaccine developments and a powerful second wave of COVID-19 cases in many Northern Hemisphere countries continues to be the primary driver in the market,” said Simon Deeley, a rates strategist at RBC Capital Markets.