U.S. Treasury yields retreat on vaccine pause


U.S. Treasury yields fell early Tuesday after Johnson & Johnson said it paused its coronavirus vaccine trial, weighing on hopes that the healthcare community was making rapid progress towards the development of a remedy for COVID-19.

What are Treasurys doing?

The 10-year Treasury note yield
TMUBMUSD10Y,
0.743%
fell 3.3 basis points to 0.742%, while the 2-year note rate
TMUBMUSD02Y,
0.148%
edged 0.6 basis point down to 0.147%. The 30-year bond yield
TMUBMUSD30Y,
1.536%
slipped 4 basis points to 1.534%. Bond prices move inversely to yields.

What’s driving Treasurys?

U.S. drugmaker Johnson & Johnson
JNJ,
+0.57%
said late Monday it had paused a clinical trial for its coronavirus vaccine after one of its participants succumbed to an “unexplained illness.” The drugmaker noted such pauses were not uncommon during clinical trials.

Rival AstraZeneca
AZN,
+1.00%
had also paused the trial of its coronavirus vaccine candidate in early September after an unexplained illness by a U.K. participant.

Nonetheless, equity futures appeared to stumble before the start of Tuesday’s opening bell, with haven assets like government bonds gaining in value.

In U.S. economic data, the consumer price index for September rose 0.2%, in line with the consensus estimate.

What did market participants say?

” Treasury prices firmed as COVID cases increases across Europe
as the U.K. lock-down in back in effect. Johnson & Johnson halt to
vaccine testing causing a bit of a “risk-off” move,” said Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities, in a note.



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