After crashing through the 1.2% barrier on Friday, the 10-year shot up above 1.3% on Tuesday. The 30-year bond yield topped 2.09% in Tuesday trading.
The Senate vote had been a foregone conclusion since Republicans had indicated in earlier votes that they consider an impeachment of a president who has left office as something that doesn’t conform with the Constitution. The main news was the decision not to go ahead with calling witnesses, which would have prolonged the procedure for days or even weeks.
The focus now shifts to President Joseph Biden’s drive for a $1.9 trillion fiscal stimulus bill, and the rollout of the COVID-19 vaccines, with their promise of getting the economy back on track. Investors are selling the super-safe Treasuries (yields move inversely to prices), and moving toward riskier assets.
Europe had its own political news to digest. Mario Draghi’s successful formation of a new Italian government increased demand for that country’s government bonds.
At one point, the sale of 10-year bonds Tuesday drew €110 billion in demand before the borrower sweetened terms on the €10 billion issue, pricing it to yield a slightly lower premium to the 0.6% yield on existing bonds. The 10-year bond yield slipped to below 0.567%
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