US Treasury securities pared a portion of their earlier gains during the American trading session. The initial rally was fueled by a drop in oil prices following a reported agreement between the US and Iran to restore transit through the Strait of Hormuz. The upward momentum in Treasuries faded after NVIDIA announced its bond issuance, with prices also facing pressure ahead of the pricing of that deal.
Shortly after 3 p.m. New York time, yields on the short and intermediate parts of the US Treasury curve were down by as much as 2 basis points, while long-end yields had moved back to near their levels at the day's open. The yield on the 10-year note was around 4.46% late in the session, having earlier fallen to 4.418% during the Asian morning.
Hedging flows related to corporate bond issuance appeared to exert a slight downward pressure on US Treasuries during the US session. Eight borrowers collectively brought $36 billion in US investment-grade bonds to market, with NVIDIA's $25 billion, seven-part bond offering being the largest.
The retreat in Treasury prices began after the announcement of NVIDIA's debt deal during the US morning. Futures trading volume spiked, with nearly 20,000 September 10-year Treasury futures contracts changing hands in one minute at 7:43 a.m. New York time, marking the period's highest volume.
Treasuries opened sharply higher in Asian trading following the US-Iran news, which pushed oil prices lower. The decline in oil prices was largely sustained throughout the day.
As of 4:19 p.m. ET, the 2-year Treasury yield was down 1.3 basis points at 4.0684%.
The 5-year Treasury yield was down 1.6 basis points at 4.1898%.
The 10-year Treasury yield was down 0.6 basis points at 4.473%.
The 30-year Treasury yield was up 0.9 basis points at 4.9755%.
The yield spread between 5- and 30-year Treasuries widened by approximately 2.7 basis points to 78.57 basis points.
The yield spread between 2- and 10-year Treasuries widened by approximately 0.9 basis points to 40.25 basis points.
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