Treasury yields rose Tuesday ahead of a key debt auction that could influence trading of U.S. government paper.
The 10-year Treasury note yield TMUBMUSD10Y, +1.47%[1] rose 1.8 basis points to 2.955%, its highest since Aug. 9. The 2-year note yield TMUBMUSD02Y, +1.37%[2] was up 1.6 basis point to 2.731%, the 30-year bond yield rose 1.3 basis points to 3.101%. Bond prices move in the opposite direction of yields.
Debt supply will offer direction to traders on a day lacking first-tier economic data. The Treasury Department will sell $34 billion of 3-year notes TMUBMUSD03Y, +1.71%[3] at 1 p.m. Eastern. The 3-year note traded at 2.800%.
The front-end of the bond market has come under the most pressure from the Federal Reserve’s rate hikes and the Treasury Department’s decision to issue shorter-dated debt to fund the yawning budget deficit. Yet, by and large, U.S. government bond prices have shown little impact from the increased borrowing after Congress enacted lifts to spending caps and passed a more than trillion dollar tax cut.
Investors will also watch for geopolitical developments abroad. The U.K. is in the midst of negotiating with Brussels over the terms of its departure from the European Union. Concerns the U.K. would leave without a trade agreement in hand has roiled British markets, but those concerns were allayed after EU chief Michel Barnier said a deal would be possible [4]within the next few weeks.
The German 10-year government bond yield TMBMKDE-10Y, +7.62%[5] advanced 2.1 basis points to 0.425%, while the U.K. 10-year bond yield TMBMKGB-10Y, +2.23%[6] added 2.6 basis points to 1.496%.
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References
- ^ TMUBMUSD10Y, +1.47% (www.marketwatch.com)
- ^ TMUBMUSD02Y, +1.37% (www.marketwatch.com)
- ^ TMUBMUSD03Y, +1.71% (www.marketwatch.com)
- ^ but those concerns were allayed after EU chief Michel Barnier said a deal would be possible (www.marketwatch.com)
- ^ TMBMKDE-10Y, +7.62% (www.marketwatch.com)
- ^ TMBMKGB-10Y, +2.23%