Treasury yields traded modestly lower on Tuesday as investors monitored the U.S.’s intensifying spat with Iran over recent sanctions and signs that a trade deal may not be reached at the upcoming meeting of U.S. President Donald Trump and Chinese leader Xi Jinping.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, -0.68% fell 1.2 basis points to 2.007%, briefly trading below 2%, while the 2-year note yield TMUBMUSD30Y, -0.27% was up 0.4 basis points to 1.740%. The 30-year bond yield TMUBMUSD30Y, -0.27% was down 1.5 basis points to 2.534%.
What’s driving Treasurys?
The budding optimism going into the G-20 summit waned after Reuters reported that a senior U.S. official said that President Donald Trump would be “comfortable with any outcome” from his scheduled talks with Chinese leader Xi Jinping. Still, both U.S. and Chinese trade officials agreed to resume trade negotiations ahead of the meeting.
After a fresh round of U.S. sanctions on Iran’s leaders, its government responded that the move had led to the “permanent closure of the diplomatic path with the government of the United States.”
Investors will also keep their eye on a raft of speakers from the U.S. central bank, headlined by Federal Reserve Chairman Jerome Powell who is set to speak at 1 p.m. Eastern time. Other policy makers set to talk include New York Fed President John Williams, Atlanta Fed President Raphael Bostic, and St. Louis Fed President James Bullard.
What else is on investors’ radar?
In economic data, the Conference Board’s consumer confidence reading for June will be released along with new home sales numbers for May at 10 a.m.
The Treasury Department will sell $40 billion of 2-year notes at 1 p.m., the first of three auctions for the week. Debt sales for government paper can influence trading for the outstanding market.