MBS Live Morning: European Covid Concerns Are Helping Bonds

As yesterday's AM commentary tacitly suggested, "winter is coming" in terms of the connection between colder temps and higher covid case counts.  Europe is ahead of the curve in that regard with several countries in the midst of parabolic case count growth.  Most notably, Austria imposed a new lockdown and vaccine mandate overnight.  The news was clearly correlated with a rapid drop in bond yields. 

Incidentally, Austria is far from unique when it comes to a surge in European case counts.   

In a broader sense, this serves as a reminder as to why rates have hesitated to re-challenge 2021's previous highs.  It also serves as a warning about how the covid narrative may unfold in the US.