U.S. Treasury yields fall as omicron impact on growth is assessed

U.S. Treasury yields fell on Tuesday after the long holiday weekend as investors assessed the omicron threat.

The benchmark 10-year T-bill yield had fallen nearly a basis point to 1.472% by 4 a.m. ET, while the yield on the 30-year T-bill fell by about a half. basis point at 1.88%. Yields move in the opposite direction of prices and 1 basis point equals 0.01%.

Bond markets were closed on Friday December 24 for the Christmas holidays but reopened on Monday. Investors have been encouraged by positive news regarding the omicron Covid variant.

A study from South Africa, published last week, found that people infected with the omicron variant of the coronavirus were 80% less likely to be admitted to hospital than if they contracted other strains. Studies in Scotland and England appear to support South Africa’s findings.

U.S. infectious disease expert Dr Anthony Fauci said on Sunday that Covid-19 cases are expected to continue to rise as the omicron variant spreads rapidly across the world.

“Every day it goes up and up. The last weekly average was around 150,000 and it will probably increase a lot more,” Fauci told ABC’s “This Week”.

The United States has reported more than 52 million cases, according to Johns Hopkins University. The omicron variant, which became the dominant strain earlier this month, is behind the surge.

A series of economic data last Thursday showed a stable economy with improving labor and spending trends, but inflation remains high.

Data released Tuesday includes the S&P CoreLogic Case-Shiller National Home Price Index for October, the Richmond Fed survey for December and the Dallas Fed’s service activity data for that month.

—Matt Clinch and Jessica Bursztynsky of CNBC contributed to this article.

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