Long-dated government bonds on Tuesday ended a three-session rise, pushing yields higher, as global equity benchmarks took cues from global stock markets, underscoring waning appetite for assets perceived as havens, including bonds.
The 10-year Treasury note yield TMUBMUSD10Y, +1.01% rose 3.7 basis points to 2.973%, a day after marking its lowest yield since July 25, according to Dow Jones Market Data, based on levels at 3 p.m. Eastern. The yield move for the benchmark represented its biggest daily gain since Aug. 1, according to Dow Jones Market Data.
The 30-year bond yield TMUBMUSD30Y, +0.86% , meanwhile, also climbed by 3.7 basis points to 3.118%. Both the 10-year and 30-year yields halted three consecutive yield declines.
The two-year note yield TMUBMUSD02Y, +0.46% rose 2.4 basis points to reach 2.674%. marking its highest level since July 26.
Yields rise as debt prices fall.
Modest selling in U.S. government paper comes as the Shanghai Composite Index SHCOMP, +2.74% gained 2.7% Tuesday, more than offsetting Monday’s losses. Hong Kong’s Hang Seng HSI, +1.54% climbed for a second day in a row, increasing 1.5%, while Japan’s Nikkei advanced by about 0.7%, reflecting a broad rally in Asian markets.
Asian assets have been under pressure amid worries about an apparent escalation of trade tensions between the U.S. and China, which has supported some appetite for assets viewed as safe plays, including U.S. fixed-income securities and the U.S. dollar. Against that backdrop, China’s main stock benchmark, the Shanghai Composite, is down roughly 16% on the year and about 21% since its peak in late January, according to FactSet data.
Over the weekend, President Donald Trump tweeted that “tariffs are working big time.”
However, moves in equities on Monday and Tuesday, with the Dow Jones Industrial Average DJIA, +0.50% and the S&P 500 index SPX, +0.28% on multisession rallies, suggest that investors are shaking off the recent bout of trade animosities.
“Treasury prices were in a tight range overnight as Asia equity markets rallied by 1% to 3% following yesterday’s move in the Dow,” said Tom di Galoma, managing director of government trading at Seaport Global Securities, in a Tuesday research note.
Bond investors also absorbed a $34 billion offering of three-year U.S. notes TMUBMUSD03Y, +0.82% auctioned in the afternoon. Debt sales can influence trading in outstanding debt, with an increase in supply tending to push yields higher and prices lower. The offering is a part of some $78 billion set to be sold over the week.
On the economic-data front, the latest report from the Labor Department showed there were 6.66 million job openings at the end of June.
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