BOND REPORT: 10-year Treasury Yield Falls To Lowest Since August

Benchmark Treasury yields dropped to their lowest level since late August as investors shunned risk in favor of perceived safety of U.S. government debt on Tuesday. The 10-year Treasury note (10_YEAR) yield, which falls as prices rise, was down 4 basis points on the day at 2.387%. The last time the yield closed below that level was Aug. 29, according to Tradeweb.

Here’s what is fueling the risk-off trade:

Investors are also preparing for a trio of U.S. Treasury note auctions this week, which kick off with a $27 billion sale of 3-year notes (3_YEAR) , part of $61 billion in total sales.

Strategists at Nomura Securities said they expected “decent” demand at the auction, but noted that “the 3-year outperformed on the curve during Monday’s rally, which may have crowded out some buy-the-dip demand.”

The 30-year bond (30_YEAR) yield dropped 3 basis points to 3.098% and the 5-year note (5_YEAR) yield fell 3 basis points to 1.663%.