Bonds

Treasury yields rise slightly on vaccine optimism

Treasury yields gained slightly on Wednesday as investors digested positive news on the vaccine front.

The yield on the benchmark 10-year Treasury note rose one basis point at 0.6782% and the yield on the 30-year Treasury bond also climbed the same magnitude to 1.4304%. Yields move inversely to prices.

Treasurys

Johnson & Johnson has begun its phase three trial testing its potential coronavirus vaccine, marking the fourth drug maker to enter late-stage testing. The other companies are ModernaPfizer and AstraZeneca. The trial will enroll up to 60,000 adult volunteers across 215 locations in the U.S. and other countries, according to the National Institute of Allergy and Infectious Diseases.

The U.S. death toll from the coronavirus pandemic topped 200,000 on Tuesday with cases nearing 6.9 million, according to data compiled by Johns Hopkins University. Wisconsin declared a public health emergency on Tuesday and extended its mask mandate through November to combat a spike in cases in the state.

On Tuesday, The House of Representatives passed a stopgap federal funding bill, with Democrats and Republicans agreeing on a deal on farming aid and nutritional help for children, that will keep the federal government operating through Dec. 11.

Investors will also monitor September's Markit Flash PMI (purchasing managers' index) readings, released at 9:45 a.m. ET, for indications as to the pace of economic recovery. Powell testifies before Congress at 10 a.m. ET.

In testimony before the House of Representatives Financial Services Committee on Tuesday, Jerome Powell and Treasury Secretary Steven Mnuchin said they were exploring more ways to extend aid to shore up small businesses amid the coronavirus-induced recession, but practical details for how this might be delivered were scarce.

Auctions will be held Wednesday for $25 billion of 105-day Treasury bills, $30 billion of 154-day bills, $53 billion of 5-year notes and $22 billion of 2-year FRNs (floating-rate notes).