Treasury yields were flat on Tuesday after Congress passed a $900 billion Covid-19 relief package.
Congress passed a mammoth coronavirus relief and government spending package. The package includes a boost to jobless benefits, more small business loans, another $600 direct payment and funds to streamline critical distribution of Covid-19 vaccines. The bill now goes to President Donald Trump’s desk.
“Whether this is sufficient to avoid a double-dip recession as the New Year gets underway is the essential debate; although one that will be tabled until Q1 is upon us and the high frequency data offers context for the performance of the labor market,” Ian Lyngen, BMO’s head of U.S. rates, said in a note.
On Monday, the 10-year Treasury yield dropped below 0.9% as fears over the new Covid variant sparked demand for the relative safety of government bonds.
The variant, which scientists say is up to 70% more transmissible than previous strains, forced the U.K. government to shut down London and other parts of southeast England and backtrack on the mixing of households over the Christmas break.
It also caused multiple countries around the world to shut their borders to Britain, disrupting travel and raising concerns over potential food shortages as the Brexit transition deadline nears.
Meanwhile, investors are also keeping an eye on the rollout of coronavirus vaccines. With the Pfizer–BioNTech vaccine already being rolled out across the country, about 6 million doses of the Moderna inoculation began to be distributed on Sunday.
In terms of data, third-quarter GDP figures are due at 8:30 a.m. ET, while consumer confidence and existing home sales numbers are expected at 10 a.m. ET.