Treasuries Gain Most in Weeks as Investor Optimism Takes a Hit

Treasuries surged Monday by the most in almost two weeks and the yield curve flattened as concerns about the coronavirus and a lack of fiscal stimulus battered investors’ appetite for risk.

The benchmark 10-year rate fell as much as five basis points to 0.79%, putting it on course for its second-straight daily decline following a six-day stretch of advances that last week saw it hit the highest since June.

Buyers flocked to U.S. bonds and other havens like gold and the dollar, while stocks received a battering. Long-end debt performed best, with demand for the 30-year bond pushing down its yield by as much as six basis points to 1.58%. The widely watched premium of 30-year yields over 5-year -- the so-called yield curve -- fell to as little as 123 basis points.

The moves, which were accompanied by a flurry of futures contracts changing hands, follow a recent run-up in yields that had been fueled by optimism over stimulus and the prospects for a clear-cut victory by Democratic challenger Joe Biden at next week’s U.S. presidential election.

©2020 Bloomberg L.P.

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