Bond Report: U.S. Treasury yields slide in day after Thanksgiving

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Treasury yields fell on Friday onn the day after the Thanksgiving holiday as the U.S. bond market caught up with the broader rally in European debt, sparked by the extension of COVID-19 restrictions on business and consumer activity.

The U.S. bond market will close early at 2 p.m. ET in line with recommendations from the Securities Industry and Financial Markets Association.

What are Treasurys doing?

The 10-year Treasury note yield TMUBMUSD10Y, 0.858% fell 1.9 basis points to 0.859%, while the 2-year note rate TMUBMUSD02Y, 0.160% was down 0.6 basis point to 0.154%. The 30-year bond yield TMUBMUSD30Y, 1.598% slipped 2.7 basis points to 1.593%.

What’s driving Treasurys?

U.S. Treasury yields followed their European counterparts lower, after news that French and German officials are keep lockdown measures in place beyond their original expiry date.

German Chancellor Angela Merkel said the country’s lockdown would be extended to Dec. 20 while the U.K. government also announced that London would return to tougher restrictions once the national lockdown is lifted on Dec. 2.

The 10-year German government bond yield TMBMKDE-10Y, -0.578% is at negative 0.58%, around a three-week low.

See: European stocks pause and U.S. futures rise despite lockdown extensions and AstraZeneca vaccine concerns

What did market participants say?

“The long end of the U.S. curve has enjoyed a bid overnight as [Treasurys] play catch up with the firm tone witnessed in Europe yesterday,” said analysts at Rabobank.

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