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U.S. Treasury yields were slightly lower in early Tuesday trade before a slug of new debt supply that could influence bond trading.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 1.143% fell a basis point to 1.150%, while the 2-year note rate TMUBMUSD02Y, 0.109% edged up 0.2 basis point to 0.113%. The 30-year bond yield TMUBMUSD30Y, 1.923% slid 1.9 basis points to 1.925%.
What’s driving Treasurys?
The U.S. Treasury Department is set to sell $58 billion of 3-year notes Tuesday afternoon. Though new issuance can weigh on government bond values, the higher yields could help markets absorb the fresh supply without suffering much indigestion.
Investors are also closely eyeing the debate around a new U.S. fiscal relief package amid growing complaints by some economists that the bill’s proposed size was too large.
The closely followed U.S. small-business optimism index compiled by the National Federation of Independent Business fell 0.9 in January to 95.0, hitting the lowest level since the onset of the pandemic.
The U.S. Labor Department will later release its Job Openings and Labor Turnover survey at 10 a.m. ET.
What did market participants say?
“The Treasury’s quarterly refunding begins today with $58 billion 3-year notes. With rate policy abroad still skewed toward [negative interest rates], the recent backup in yields similar to the last long end cycle, should bring in buyers,” said Gregory Faranello, head of U.S. rates at AmeriVet Securities.
