Treasuries Pull Back Sharply Amid Easing Omicron Concerns

(RTTNews) - After moving sharply higher over the past several sessions, treasuries showed a significant pullback during trading on Monday.

Bond prices moved lower early in the day and saw further downside over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 9.1 basis points to 1.434 percent.

The pullback by treasuries may partly have reflected profit taking after the ten-year yield ended last Friday's trading at its lowest closing level in well over two months.

Easing concerns about the Omicron variant of the coronavirus also led traders to cycle out of safe havens like bonds and into riskier assets like stocks amid indications the new strain causes milder symptoms.

President Joe Biden's chief medical adviser Dr. Anthony Fauci told CNN it is too early to make definitive statements but said early signals regarding the severity of Omicron are "encouraging."

Fauci also expressed optimism the Biden administration could lift travel restrictions on several African nations in a "reasonable period of time."

The steep drop by treasuries may have been exacerbated by below average volume, as some traders stuck to the sidelines amid a lack of major U.S. economic data.

News on the Omicron front may continue to impact trading on Tuesday, while reports on the U.S. trade deficit and labor productivity and costs may also attract attention.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auction of $54 billion worth of three-year notes.