10-year Treasury yield falls for 4th straight day amid fears of a worsening pandemic

Strategist on how investors should handle current market volatility
Strategist on how investors should handle current market volatility

U.S. Treasury yields ebbed lower on Wednesday as investors remained on edge about the spikes in new coronavirus cases.

The yield on the benchmark 10-year Treasury note fell to 0.756%, the lowest level since Oct. 16. It also marked the fourth straight day of decline for the 10-year rate. The yield on the 30-year Treasury bond slipped to 1.542%. Yields move inversely to prices.

The 10-year yield broke above 0.80% earlier this month, for the first time since June. 

Tuesday marked the third consecutive day the U.S. set a record high of average daily Covid-19 cases. The number of new U.S. cases on Tuesday hit an all-time high of 71,832, on a seven-day-average, topping the prior record set on Monday, according to a CNBC analysis of data from Johns Hopkins University.

Coronavirus-related hospitalizations are up 5% or more in 36 states, according to data from the Covid Tracking Project. This uptick has led some countries to reinstate certain lockdown measures. In the U.S., the state of Illinois has ordered Chicago to shut down indoor dining.

"Treasuries bull flattened further overnight as global risk assets came under pressure on renewed lockdown momentum in Europe," Ian Lyngen, BMO's head of U.S. rates, said in a note Wednesday. "The implications from a resurgence of the pandemic as winter approaches will guide domestic equities in the medium term."

Meanwhile, the White House and congressional Democrats have failed to so far reach an agreement over certain terms in the stimulus package.

Auctions will be held Wednesday for $25 billion worth of 105-day bills, along with $30 billion worth of 154-day bills. Another $55 billion in five-year notes also go up for sale today, as well as $26 billion of two-year floating-rate notes (FRNs).