US Treasury yields rose on Monday morning, as investors kept an eye on the latest developments with the Covid omicron variable.
return on standard 10-year treasury bonds It rose 5 basis points to 1.5363% at around 7:00 AM ET. return on 30 year treasury bonds It rose 5 basis points to 1.8805. Returns move inversely with prices and one basis point is 0.01%.
Treasury yields tumbled on Friday as investors searched for safe haven assets, amid concerns about the newly discovered Covid variant.
The World Health Organization described the new Omicron strain of Covid as a “kind of concern” on Friday.
As scientists continue to research the variant, the large number of omicron mutations has raised concern. Preliminary evidence indicates that the breed has an increased risk of reinfection, according to the World Health Organization.
The variant was first reported to the World Health Organization from South Africa and has is found In the United kingdom, Israel, BelgiumAnd HollandAnd GermanyItaly, Australia and Hong Kong, but not yet in the United States, many countries, including the United States, have moved to travel restriction from South Africa.
Looking at data releases due later in the week, investors will be watching the November Nonfarm Payrolls report, due for release on Friday. Jobs and inflation data is used by the Federal Reserve to determine its schedule for monetary policy normalization.
Andrew Sheets, senior cross-asset analyst at Morgan Stanley, told CNBC’s “Squawk Box Europe” on Monday that his team believes markets will now price with a lower rate hike in 2022, on the back of this latest news about the omicron variable.
He said Morgan Stanley expects the Fed not to start raising rates until the first quarter of 2023 and believes the market will rate it higher after that, implying a “later start but at a faster pace after” that point.
On Monday, Federal Reserve Chairman Jerome Powell is scheduled to deliver opening remarks at an event presenting the New York Center for Innovation, at 3:05 p.m. ET.
Fed Governor Michelle Bowman is scheduled to speak on Central Banks and Indigenous Communities at the Virtual Symposium on Indigenous Economies, 5:05 p.m. ET.
Meanwhile, pending home sales data for November is due at 10 AM ET.
Auctions are scheduled for Monday for $57 billion for 13-week bills and $51 billion for 26-week bills.
– CNBC’s Hana Miu contributed to this market report.