Bonds

Treasury yields drop after weaker economic data, Democrats discuss impeachment

U.S. government debt yields fell again on Tuesday amid a string of weaker economic data and discussion among top Democrats over the possible impeachment of President Donald Trump.

The yield on the benchmark 10-year Treasury note was lower at around 1.659%, while the yield on the 30-year Treasury bond was also lower at around 2.111%. The 2-year yield fell to 1.626%; yields fall as prices rise.

The latest round of Treasury buying came after the largest slip in U.S. consumer confidence in nine months. The Conference Board said on Tuesday that confidence slipped in September to 125.1 from 134.2 in August, missing expectations of a print of 133.5.

"Consumers were less positive in their assessment of current conditions and their expectations regarding the short-term outlook also weakened," said Lynn Franco, senior director of economic indicators at the Conference Board. "While confidence could continue hovering around current levels for months to come, at some point this continued uncertainty will begin to diminish consumers' confidence in the expansion."

Yields also fell on Tuesday as the number of congressional Democrats open to some type of action on the impeachment of President Trump jumped to north of 160, well over half the House caucus. The record support for exploring a formal accusation comes after Trump confirmed he withheld aid to Ukraine over frustrations with European allies.

That confirmation followed multiple reports that Trump asked staff to withhold about $400 million in aid more than a week before a July phone call in which the president pressed his Ukranian counterpart to investigate the son of Democrat presidential hopeful Joe Biden.

Trump denies that he pressured Ukrainian President Volodymyr Zelensky in their call July to investigate the Bidens.

But his personal lawyer, Rudy Giuliani, said Monday he can't be "100%" certain that Donald Trump did not threaten to withhold foreign aid when Trump reportedly urged Ukraine's president to investigate the son of 2020 Democratic frontrunner Joe Biden.

U.S. debt markets traded higher on Monday as investors received weak economic data in Europe and growing concerns of an economic slowdown.

German manufacturing activity dropped to its lowest level since the financial crisis this month, according to data from IHS Markit. Germany's services sector also grew at its slowest pace in nine months. Overall, manufacturing in the euro zone fell to a more than six-year low while services grew at is slowest pace in eight months, the data showed.

On top of this, traders are watching developments on the trade front, after a Chinese delegation left the United States earlier than planned. However, the U.S. Treasury Secretary, Steven Mnuchin confirmed Monday that trade talks between the world's two largest economies would resume next month.

Treasurys