Treasury yields jump for a second day as investors return to risk assets


Treasury yields climbed for a second day on Wednesday as investors shrugged off the potential economic impact of China's fast-spreading coronavirus.


The yield on the benchmark 10-year Treasury note, which moves inversely to price, rose five basis points to around 1.634%, while the yield on the 30-year Treasury bond was also higher at around 2.093%.

The benchmark 10-year yield plunged about 40 basis points in January as the Chinese epidemic drove investors to safe assets.

Investors continued to keep an eye on the fast-spreading coronavirus. As of Tuesday evening, China's National Health Commission reported that a total of 44,653 cases had been confirmed, with 1,113 deaths.

The outbreak, which has infected people in over two dozen countries, was described as a "very grave threat" to the world by the director-general of the World Health Organization (WHO) on Tuesday.

The WHO's Tedros Adhanom Ghebreyesus also told reporters at a news conference that the United Nations health agency had identified the flu-like virus as COVID-19. The CO stands for corona, the VI for virus and the D for disease, Tedros said.

Meanwhile, Federal Reserve Chairman Jerome Powell returned to Capitol Hill for a second day of testimony on monetary policy, the economy and financial statutes.

In his testimony before the House Financial Services Committee on Tuesday, Powell said that the current, low level of interest rates is appropriate given tame inflation, low unemployment and modest economic growth.

On the data front, the Federal budget for January will be released at 2 p.m. ET. Philadelphia Fed President Patrick Harker and Dallas Fed President Robert Kaplan will both comment on the world's largest economy at separate events on Wednesday.

Meanwhile, the U.S. Treasury is set to auction $27 billion in 10-year notes on Wednesday.