Bonds

Treasury yields rise on coronavirus vaccine hopes and economic reopening

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Treasury yields climbed on Tuesday in a holiday-shortened week, with mounting optimism about a coronavirus vaccine driving some risk-on sentiment from investors.

Treasurys

The yield on the benchmark 10-year Treasury note rose 3 basis points to 0.687% and the yield on the 30-year Treasury bond traded 5 basis points higher to 1.421%. Yields move inversely to prices.

American biotech company Novavax said Monday that it had started the first human study of its experimental coronavirus vaccine, with initial results on safety and immune responses expected in July.

The news followed Moderna's announcement last week that all 45 patients in its vaccine trial had developed coronavirus antibodies.

Data out Tuesday showed signs of an economic recovery as states gradually reopen their economies. A measure of consumer confidence jumped to 86.6 this month from 85.7 in April, according to the Conference Board. Economists polled by Dow Jones expected consumer confidence of 82.3 in May. 

Meanwhile, new home sales in April also topped estimates. Sales of new U.S. single-family homes increased by 623,000 last month, beating estimates of 490,000, according to Dow Jones.

As states look to tentatively reopen their economies, the U.S. has now confirmed more than 1.6 million cases of the virus, resulting in more than 98,000 deaths, according to Johns Hopkins University.

Investors will also keep an eye on a flaring of trade tensions between the U.S. and China, with disputes over blame for the coronavirus pandemic and new Hong Kong security laws threatening to derail the landmark "phase one" trade agreement signed in January.

Auctions will be held Tuesday for $63 billion of 13-week Treasury bills, $54 billion of 26-week bills, $65 billion of 42-day bills and $44 billion of 2-year notes.