After showing a strong move to the upside at the start of trading on Monday, treasuries gave back ground over the course of the session.
Bond prices pulled back well off their initial highs, ending the day nearly unchanged. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.941 percent after hitting a low of 0.895 percent.
Treasuries initially benefitted from their appeal as a safe haven amid concerns about a new coronavirus strain in the U.K., with the variant said to be 70 percent more infectious than the original strain.
The news of the new strain led Canada as well as several European countries, including Germany, France, Italy and the Netherlands, to order a suspension of flights from Britain.
More than 16 million Britons are now required to stay at home as a full lockdown came into force in London and the southeast of England.
Buying interest waned over the course of the session, however, as traders also reacted to news that Congressional leaders have reached an agreement on a new $900 billion relief package.
The bill will purportedly provide more federal assistance to small businesses, healthcare providers, and the unemployed and includes direct payments worth up to $600 per adult and child.
“As the American people continue battling the coronavirus this holiday season, they will not be on their own,” Senate Majority Leader Mitch McConnell, R-Ken., said in a post on Twitter.
He added, “Congress has just reached an agreement. We will pass another rescue package ASAP. More help is on the way.”
House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., expressed support for the bill but said they plan to push for more relief once President-elect Joe Biden is sworn in.
News on the coronavirus front may attract attention on Tuesday, while traders are also likely to keep an eye on reports on consumer confidence and existing home sales.
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