Treasury Yields Slide amid Tariff Uncertainty, CVS Bond Sale



U.S. government bonds slightly retreated on Tuesday, paring early gains, after traders position amid a massive corporate bond offering by CVS Health and as uncertainty regarding global tariffs on aluminum and steel imports weighed on markets.

The 10-year Treasury note yield was mostly unchanged at 2.877 percent. Yield on the two-year note yield was mostly flat at 2.246 percent. The long bond or the 30-year bond rate edged down by 1.6 basis points to 3.135 percent.

According to traders, the bond market steadied as CVS Health Corp. acquired around $50 billion dollar worth of debt on Tuesday. Firms looking to issue bonds depend on dealers to unload the massive stockpiles and the said dealers will most likely hedge a sudden jump in interest rates by letting go of their Treasury holdings.

U.S. government paper experienced brief selling earlier in the session after House Majority Leader Paul Ryan, along with other congressional Republicans, appear to step up pressure on President Donald Trump to ease up on his protectionist stance. On the other hand, Treasury Secretary Steven Mnuchin stated Mexico and Canada will be excluded from the tariffs if NAFTA is successfully renegotiated. The lack of certainty on the trade front has weakened the demand for stocks, while increasing the demand for bonds.

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