U.S. Treasury yields were trading higher on early Monday’s trade as investors eyed progress toward distribution of a vaccine against COVID-19.
What are Treasurys doing?
The 10-year Treasury note yield
rose 1.2 basis points to 0.854%, while the 2-year note rate
was flat at 0.156%. The 30-year bond yield
edged 0.9 basis point higher at 1.586%.
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What’s driving Treasurys?
Moderna said it would ask regulators to grant emergency use authorization for its COVID-19 vaccine candidate, with results showing that it displayed a 94% efficacy. The U.S. will receive access to Moderna’s vaccine first.
The positive vaccine news, however, was offset by the more immediate realities of a pandemic that is only expected to intensify after the Thanksgiving Day holiday last week.
The U.S. counted 136,313 new cases on Sunday, and at least 818 people died, according to a New York Times tracker. In the last week, the U.S. has averaged 162,007 cases a day, up 8% from the average two weeks ago.
With the end of the month in sight, portfolio managers may also snap up bonds to extend the overall maturities of their holdings to stay in line with their competing benchmarks. As debt matures, a bond portfolio’s average maturity is falling over time and therefore needs to be topped up at the end of every month.
In economic data, November Chicago PMI and pending home sales index for October are due in the morning.
What did market participants say?
“The market tone will continue to be determined by the uneasy balance between hopes of a longer-term resumption of normal activity as vaccines are rolled out and a nearer-term realization as to the damage currently being caused by the virus,” said Rabobank analysts.