FAST FIVE: U.S. And German Yields Will Bear Brunt Of Lockdowns
Stocks have rallied this month on vaccine optimism and reduced US political uncertainty.
With this rapid acceleration, governments have enacted partial lockdowns — and extended them in Germany.
Should rising caseloads and stretched resources lead to even tighter restrictions in 2021, the all-time lows in the 10-year UST (0.31%) and bund (-0.91%) yields could easily be revisited.
Any package will likely be less expansive than the previous initiatives, and may still be several months away.
Failing these eventualities, the pandemic's economic drag opens up a lot of downside for German and US yields.