U.S. government debt prices rose on Tuesday as investor sentiment was shaken by a fast-spreading new coronavirus strain in the U.K.
The yield on the benchmark 10-year Treasury note sank to around 0.918%, while the yield on the 30-year Treasury bond fell to 1.656%. Bond yields move inversely to prices.
On Monday, the 10-year Treasury yield dropped below 0.9% as fears over the new Covid variant sparked demand for the relative safety of government bonds.
The variant, which scientists say is up to 70% more transmissible than previous strains, forced the U.K. government to shut down London and other parts of southeast England and backtrack on the mixing of households over the Christmas break.
It also caused multiple countries around the world to shut their borders to Britain, disrupting travel and raising concerns over potential food shortages as the Brexit transition deadline nears.
Still, investors could find some comfort from a $900 billion Covid-19 relief package from Congress and longer-term optimism about the global vaccine rollout.