U.S. government debt prices edged lower Tuesday morning as negotiations continue in Washington over a massive fiscal stimulus package to combat the coronavirus pandemic.
At around 3:00 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was modestly higher at 0.8243%, while the yield on the 30-year Treasury bond was up at 1.4025%.
The bill to authorize huge fiscal spending to prop up the economy failed in the Senate for a second time Monday, initially sending the 10-year yield below 0.7% and Wall Street deeper into a bear market with its major indexes hitting new multi-year lows.
Senate Minority Leader Chuck Schumer, D-NY, and Treasury Secretary Steven Mnuchin met Monday night to try and work out a deal, with Democrats concerned that the $500 billion relief proposal for distressed businesses is in essence a bailout fund “with no strings attached.”
The downward pressure on investor sentiment came despite the Federal Reserve’s announcement on Monday of an unlimited asset purchase program in a bid to ensure markets continue to function properly.
U.S. Markit flash composite, goods and services PMI (Purchasing Managers’ Index) readings for March are set for publication at 9:45 a.m. ET on Tuesday, before new home sales figures for February at 10 a.m. ET.
Auctions will be held Tuesday for $26 billion of 52-week Treasury bills and $40 billion of 2-year Treasury notes.