US Treasury yields pare gains after trade deficit widens in October

U.S. government debt yields varied Tuesday after the U.S. Department of Commerce reported that the trade deficit widened to its highest level since January.

The yield on the benchmark 10-year Treasury note fell to 2.36 percent at 2:53 p.m. ET, while the yield on the 30-year Treasury bond was down at 2.732 percent. Bond yields move inversely to prices.

Meanwhile, the 2-year Treasury yield held at a high of 1.831 percent, its highest level since Oct. 15, 2008 when the 2-year yielded as high as 1.832 percent.


The trade deficit broadened to its widest level since January in October, according to the latest from the Commerce Department. The foreign-trade gap in goods and services expanded 8.6 percent from September to a seasonally adjusted $48.73 billion, according to the report.

While imports climbed a healthy 1.6 percent, exports were essentially unchanged over the month. While the U.S. continued to ship high volumes of petroleum, those export gains may have been offset by higher holiday shopping; consumer goods imports increased roughly $800 million.

Bond investors are awaiting the ultimate make-up of the Republican tax bill and its cost. The Senate narrowly passed a major tax bill over the weekend, briefly launching the Dow Jones industrial average more than 300 points during Monday's trade. The index closed roughly 50 points higher and was set to hit an all-time high Tuesday.

Aside from tax reform and ongoing rumblings surrounding the current U.S. administration's relationship to Russia, other news set to shake up sentiment Tuesday concerns the Supreme Court. On Monday, the court allowed the Trump administration to fully enforce a ban on travel to the U.S., for residents of six mostly-Muslim countries.

Lastly, the Senate committee on banking, housing and urban affairs will meet in executive session to consider the nomination of Jerome Powell as the next chairman of the Federal Reserve.