US Treasury bonds declined on Tuesday, with losses accelerating into the close, as news that the US is revoking sanctions waivers for Iranian oil sales propelled crude prices higher. Additionally, investors awaited pricing for a massive bond issuance from Amazon. Earlier, a 3-year Treasury auction saw robust demand, with the awarded yield 0.6 basis points below pre-auction trading levels, and primary dealers receiving a record-low share.
Shortly after 3 p.m. New York time, US Treasury yields were broadly higher by 6 to 7 basis points, nearing their daily peaks, with a parallel upward shift across maturities. Yield curve spreads changed by less than 1 basis point from Monday's close. The 10-year Treasury yield climbed nearly 8 basis points, breaking above 4.54%.
The sell-off in Treasuries intensified as the rally in oil prices gained momentum. WTI crude futures surged as much as 5.8% to $72.51 per barrel, reaching a near two-week high.
Amazon's $25 billion bond offering will push this week's total supply above the $20 billion to $25 billion range traders had anticipated, following nearly $12 billion in bonds priced on Monday.
Primary dealers were awarded just 7.7% of the US 3-year Treasury note auction, the lowest share since records began in 2004. Indirect bidders took 67.5%, while direct bidders received 24.8%.
As of 4:07 p.m. ET, the 2-year Treasury yield was at 4.1786%.
The 5-year Treasury yield was at 4.2761%.
The 10-year Treasury yield was at 4.5451%.
The 30-year Treasury yield was at 5.0516%.
The spread between the 5-year and 30-year Treasury yields was 77.37 basis points.
The spread between the 2-year and 10-year Treasury yields was 36.44 basis points.
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