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Treasurys stung by corporate deals, 30-year yield taps 3%

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US 3-MO
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US 1-YR
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U.S. sovereign bonds on Tuesday, with prices pressured by institutional investors readying for a big corporate bond deal by leading retailer Amazon.

Treasurys, which posted strong returns during November, also declined on Monday, when Medtronic Inc priced $17 billion of senior notes. That deal included a large portion of long-dated bonds.

"There is a lot of corporate issuance that's being hedged and that's applying a lot of pressure," said Sean Murphy, a Treasuries trader at Societe Generale in New York.

Hedging against expected exposure to corporate deals can at times pressure bonds, as investors conduct trades known as "rate-locking" that involves selling Treasuries to offset coming purchases of corporate bonds.

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According to IFR, a unit of Thomson Reuters, Bank of America and other banks working for Amazon were expected to price on Tuesday a five-part senior unsecured offering for the online retailer.

Much of the deal, whose size was unknown, was expected to be long-term debt, according to Murphy.

Yields on 30-year Treasurys topped 3 percent briefly after data showed U.S. construction spending in October was healthier than forecast. The bond was last off 14/32 and yielding 2.99 percent, according to Reuters data.

The 10-year Treasury note was last off 9/32 to yield 2.27 percent.

This week's declines in Treasuries follow strong gains in long maturities during November, according to Kevin Horan, director of fixed income indices at S&P Dow Jones Indices.

Ten-year Treasurys tracked by the S&P/BGCantor Current 10 Year U.S. Treasury Bond Index also tightened by 16 basis points, Horan said.