Bond Prices Fall

U.S. Treasury prices fell further Tuesday in light trade with the mid-curve hit hardest as the market slid into a range but taking aim at Monday lows. The market will start digesting new Treasury supply with the $26 billion two-year auction up late in the session. A run of housing data improved along with the Richmond manufacturing report while the April consumer confidence headline missed, but remains near 16 year highs.

The 30-year yield recently traded near 2.955% from a 2.9204% overnight low, a 2.9632% high and 2.93% close Monday. The 10-year was near 2.305% from a 2.268% low, 2.3146% high and a 2.275% close. The five-year yield is near 1.84% from a 1.7967% low, 1.8466% high and 1.805% Monday. The two-year was near 1.26% from a 1.2293% low, 1.2704% high and close near 1.23%.

The curve trade is mixed with the yield spread between the two- and 10-years little-changed near 1.04 plus, while the yield gap between the five- and 30-years flattened to 111 plus from near 1.12 plus.

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