Treasury yields inch higher with recovery prospects, coronavirus cases in focus

U.S. government debt prices were slightly lower on Tuesday morning as investors monitored the prospects of imminent economic recovery.

At around 2:10 a.m. ET, the yield on the benchmark 10-year Treasury note was fractionally higher at 0.7053% and the yield on the 30-year bond was up slightly at 1.4662%. Yields move inversely to prices.

Risk markets received a brief scare overnight after White House trade advisor Peter Navarro told Fox News that the U.S.-China trade deal was “over,” but Navarro quickly walked back the comments, claiming to have been taken “wildly out of context” and calming investor sentiment.

Investors will be looking ahead Tuesday to IHS Markit’s flash PMI (purchasing managers’ index) readings for June, set for release at 9:45 a.m. ET, which could indicate the pace of recovery in economic activity following months of coronavirus-induced lockdown measures.

However, market focus is also attuned to rising coronavirus infections across the U.S. and beyond as economies continue to reopen, with a number of states reporting record daily spikes in new cases and hospitalizations over the past week.

Following the PMI data, May’s new home sales figures are due at 10 a.m. ET on Tuesday.

Auctions will be held Tuesday for $40 billion of 119-day Treasury bills, $20 billion of 273-day bills, $40 billion of 42-day bills and $46 billion of 2-year notes.

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