Treasury yields fall back from rally driven by vaccine news

  • The benchmark yield rate reached 0.975% on Monday, its highest point since March 20.
  • A vaccine developed by Pfizer and BioNTechwas found to be more than 90% effective in preventing Covid-19 among those without evidence of prior infection.

U.S. Treasury yields retreated on Tuesday from previous session highs, driven by the hopeful news of an effective coronavirus vaccine.

The yield on the benchmark 10-year Treasury note fell back to 0.929% at 4:39 a.m. ET, while the yield on the 30-year Treasury bond slipped to 1.698%. Yields move inversely to prices.

Treasurys

The benchmark yield rate reached 0.975% on Monday, its highest point since March 20, following news that a vaccine developed by Pfizer and BioNTech is proven to be more than 90% effective in preventing Covid-19 among those without evidence of prior infection.

The news sparked a rally in global stock markets, which had already shot up following Democrat Joe Biden's projected win in the U.S. presidential election over the weekend.

Confirmed cases of the coronavirus remain high in the U.S., with 199,944 new infections recorded on Monday, according to data compiled by Johns Hopkins University.

The Federal Reserve warned that U.S. household defaults on debt may rise amid the pandemic, in its bi-annual Financial Stability Report published Monday. The U.S. central bank also said that asset prices "remain vulnerable to significant declines" due to uncertainty around the pandemic and the pace of recovery.

Data from the November IBD/TIPP Economic Optimism, a poll of consumer confidence, is due out at 12 p.m. ET, along with September figures for JOLTs Job Openings.

Randal K.Quarles, Fed vice chair for supervision, is due to make a testimony at 4 p.m. ET and Lael Brainard, a member of the Fed's board of governors, is set to speak at 7 p.m. ET.

The American Petroleum Institute is expected to report inventory levels of U.S crude oil, in its weekly Crude Oil Stock Change at 6:30 p.m. ET.

An auction will be held Tuesday for $41 billion of 10-year notes.

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