Bonds

Treasury yields fall as coronavirus fears linger

Treasury yields fell on Monday as investors remain cautious about the deadly coronavirus.

The yield on the benchmark 10-year Treasury note, which moves inversely to price, dipped three basis points to around 1.543%, while the yield on the 30-year Treasury bond was also lower at around 2.015%.

Part of the so-called yield curve inverted again on Monday, with the 10-year yield falling below the three-month Treasury rate of 1.558%, sending a recession signal.

Traders continue to monitor the outbreak of the coronavirus. As of Sunday night, China said a total of 40,171 cases of coronavirus had been confirmed and 908 people had died, while 14 Americans have tested positive for the virus aboard a cruise ship quarantined in Japan. The death toll from the coronavirus has also overtaken that of the SARS outbreak in the early 2000s.

Treasurys

Businesses are still being affected by the outbreak though China has lifted some of the restrictions on work and travel. Airbnb, for example, has suspended bookings for all listings in Beijing until February 29.

Chinese authorities lifted some coronavirus-related restrictions on work and travel, helping businesses resume work though overall sentiment was still jittery as the death toll from the epidemic climbed to above 900.

The benchmark 10-year Treasury yield has fallen about 40 basis points in 2020 as the fears that the coronavirus would disrupt the global economy drove investors to safe-haven bonds.

Meanwhile, President Donald Trump unveiled a new $4.8 trillion spending plan on Monday. He is expected to cut foreign aid and reduce social safety-net programs for the fiscal year of 2021, provided that he is re-elected later this year.

Meanwhile, the U.S. Treasury is set to auction $84 billion in 13 and 26-week bills.