ISSN: 2056-3736 (Online Version) | 2056-3728 (Print Version)


Treasury yields dropped, reversing early gains, as a surprise drop in durable-goods orders on Tuesday added to worries about a slowing U.S. economy.

The yields on 10-year and 30-year Treasurys were both down five basis points to 1.765% and 2.350%, according to Tradeweb data.

The two-year Treasury yield shed three basis points to 0.495%.

Treasury yields rose earlier in the session as investors sold bonds ahead of three bond auctions expected later in the week. The Treasury Department is expected to sell $26 billion of two-year notes on Wednesday. It was initially scheduled for Tuesday, but was delayed because of inclement weather. An $35 billion auction of five-year notes was also delayed. It will be held Thursday instead of Wednesday.

A $29 billion auction of seven-year notes will he held Thursday as originally scheduled.

Tom di Galoma, head of rates and credit trading at ED & F Man Capital Markets, said Treasurys typically see strong selloffs when auctions are held so close together.

“That’s just not a good thing for the market because everything gets really congested,” di Galoma said. “There’s just too much supply there when you get two auctions like that.”

Orders for durable goods dropped 3.4% in December, the fourth decline in the past five months. Economists surveyed by MarketWatch had expected orders to rise 0.1%. Adding to the sense of weakness, durable-goods orders for November were revised to show a 2.1% decline instead of a 0.9% decline.