Yields on US bonds fall on COVID-19 fears and low liquidity

U.S.A.Yields on US bonds fall on COVID-19 fears and...

by Karen Brettel

NEW YORK, Nov 19 (Reuters) – U.S. Treasury yields fell on Friday as concerns over new COVID-19-related closures in Europe fueled increased demand for safe-haven assets, although liquidity has plummeted in recent weeks. The move was exaggerated by the fall.

* The German health minister said confinement, including those who were vaccinated, could not be ruled out. Austria said it would re-impose a total lockdown next week and require its entire population to be vaccinated starting in February.

* Europe has once again been the epicenter of the pandemic in recent weeks. The market, which had so far been relatively calm despite the outbreak, jumped sharply on the news, sending Germany’s entire yield curve back into negative territory for the first time since August.

* The European response has raised some concern about the prospect of new closures in the United States, as well as if a huge increase in cases is detected, which would hurt the economy.

* “Although Europe has been more aggressive in terms of heavy-handed government responses to COVID than the United States, there is always talk that the same could happen here if there were a significant increase in cases,” says Tom Simmons , said the Jefferies Money Markets economist. New York, though he added that “I don’t think those fears are justified.”

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* The magnitude of the backlash, which slashed 10-year yields by nine basis points on the day, also indicates a decline in market liquidity, which analysts say is partially hedged by volatile October movements. due to the consumption of funds. November.

* The 10-year benchmark was 1.536%, down five basis points on the day, after falling to 1.515%, the lowest level since November 10.

* The Treasury will sell $176 billion in new offerings next week, including $58 billion in two-year notes and $59 billion in five-year notes on Monday, as well as $59 billion in seven-year notes on Monday. ,

(Additional information from Yoruk Bahcelli in London, edited in Spanish by Gabriela Donoso)

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