US Treasury yields slid on Friday as fears of a new lockdown in the eurozone led to a drop in sovereign bond yields across the region. The German health minister said that the possibility of introducing a lockdown, including for vaccinated people, cannot be ruled out. Austria plans to reintroduce self-isolation next week and will require vaccinations for its entire population from February.
Europe has once again become the epicenter of the pandemic in the past few weeks. Markets, which have so far been relatively calm despite the coronavirus' resurgence, have sharply changed dynamics after the news—for the first time since August, the entire yield curve in Germany has returned to negative territory.
US Treasury yields fell following a sharp drop in UK bond yields. The yield on 10-year US government bond fell by almost 3 basis points to 1.55% on Friday. Other segments of the yield curve moved in a similar manner, leaving the spread largely unchanged throughout the day.