BOSTON: Cautious traders kept US Treasury yields little changed on Monday as they tried to gauge what further steps policymakers might take to blunt the economic impact of the deadly COVID-19 pandemic.
The benchmark 10-year yield was up less than a basis point in morning trading at 0.686%.
Yields on other instruments also were little changed, and more stable than on Friday. Then, two-year Treasury yields hit record lows on technical factors and concerns the Federal Reserve could cut rates into negative territory.
Data showed the US economy lost a staggering 20.5 million jobs in April in a stark sign of how the novel pandemic has battered the world's largest economy.
Michael Lorizio, senior fixed income trader for Manulife Investment Management in Boston, said Monday's calm showed investors staying crowded into shorter-term securities with no signs the Fed would raise interest rates anytime soon.
"The front end of the curve is an easy place to own," he said. "There are forecasts for the next rate hike to come sometime in 2023, it's as good as any prediction but it's still just a guess," he said.
The US Treasury is scheduled to give results of an auction of 3-year notes around 1 p.m.
Germany reported on Monday that new coronavirus infections were accelerating exponentially after early steps to ease its lockdown, news that sounded a global alarm even as businesses opened from Paris hair salons to Shanghai Disneyland.
A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 53 basis points, about a basis point higher than on Friday's close.
The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up less than a basis point at 0.1509%.