Treasury yields dropped on Monday due to signs that the COVID-19 pandemic is getting worse, driving investors into safe assets.

The yield on the benchmark 10-year Treasury note dropped three basis points to 0.6601 percent while the yield on the 30-year Treasury bond fell about five basis points to 1.4026 percent.

The Treasury yields fell as the stocks also dropped for the fourth straight day. Head of U.S. rates, Ian Lyngen, said that concerns with the rising COVID-19 positive cases in Europe and the risk of another lockdown in London have contributed to the investors' worries.

They were worried over reports that the U.K. leader is considering another nationwide lockdown to stop the spread of COVID-19.

COVID-19 positive cases in the U.K. have started to rise daily, with 4,000 new cases recorded on Sept. 20. Thus the plan to put the public under a stricter measure.

Lyngen added that the drop of Treasury yields is a reminder that recovering from the impact of the economic fallout as a result of the COVID-19 pandemic will be long, hard, and fraught with hazards. 

Fixed income director at the Bryn Mawr Trust in Berwyn, Pennsylvania, Jim Barnes, said that treasuries' attention seems to be on the stock market.

He added that it is not just today's stocks weakness, but it is in the weakness that we have seen in the past few days that is finally catching up to the bond investors.

Aside from the possibility of another nationwide lockdown in the U.K., the drop in Treasury yields is also attributed to political issues, such as the uncertainty of the Nov. 3 general election as well as the Republicans and Democrats failing to reach a deal to pass another COVID-19 stimulus package. 

President Donald Trump and Democrat presidential candidate Joe Biden are on the final stretch of their campaign, and while Biden is leading in the national polls, Trump is not far behind as he is successfully luring Latinos to his side.

The Republicans and Democrats' continued standoff in passing another COVID-19 relief aid is also affecting the Treasury yields. And it looks like one will not pass until after the election.

The stimulus checks were supposed to give Americans spending money to mitigate the pandemic's effects on the economy. And while no end can yet be seen on a second stimulus package, it looks like it will further be delayed by the passing of Supreme Court Justice Ruth Bader Ginsberg.

This because Trump and Senate Majority Leader Mitch McConnell want to fill the seat left by Ginsburg immediately.

The Democrats, however, are arguing who to put in the high court position, which is a life-time appointment, should be made by whoever wins on Nov. 3.  

Despite the drop, the Treasury yields recovered from their worst day levels as a sell-off in equity markets continued from the prior week. 

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