The benchmark 10-year Treasury yield rose Tuesday as markets grew optimistic that a prolonged government shutdown could soon be resolved.
The yield on the 10-year Treasury advanced more than 2 basis points to 4.122%, while the 2-year note yield added less than 1 basis point to 3.595%. Meanwhile, the 30-year bond yield rose more than 1 basis point to 4.712%.
One basis point is equal to 0.01%, and yields and prices share an inverse relationship.
Investors are monitoring developments in Washington as bipartisan negotiations advance toward a spending deal to end the shutdown, which has partially closed the federal government since Oct. 1.
Late Sunday, the Senate passed a procedural vote to move the deal forward, backed by 60 senators after eight Democrats crossed party lines.
The shutdown has stalled major economic data releases, including last week’s jobs report and this week’s scheduled inflation figures. In the absence of official data, investors and officials have turned to limited private-sector indicators for guidance.
A risk-on tone contributed to a modest cheapening in Treasuries as stocks rallied on hopes that the U.S. government shutdown could come to an end as soon as this week, said Ian Lyngen, managing director and head of U.S. rates strategy in the BMO Capital Markets’ fixed income strategy team.
Markets will also be keeping an eye on a speech by Fed Governor Michael Barr later in the day.