Treasurys Pull Back After Recent Gains

By Sam Goldfarb Features Dow Jones Newswires

U.S. government bonds pulled back Tuesday as global investors showed less appetite for safer assets following a recent bout of caution.

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In recent trading, the yield on the benchmark 10-year Treasury note settled at 2.215%, according to Tradeweb, compared with 2.182% Monday.

Yields, which rise when bond prices fall, ticked higher overnight as stocks in Europe gained after three consecutive sessions of declines.

Yields, which rise when bond prices fall, ticked higher overnight as stocks in Europe gained after three consecutive sessions of declines.

Factors that have weighed on stocks and bolstered bonds include some disappointing corporate earnings, terrorist attacks in Spain, and creeping concerns about Congress's ability to meet upcoming deadlines to pass spending legislation and raise the debt ceiling, analysts said.

Still, there has been little sign of panic among investors, and Tuesday's moves represented a "reversal of the risk-off trade that happened in the previous few sessions," said Kevin Giddis, head of fixed-income capital markets at Raymond James.

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After a long stretch of low volatility, some analysts have pointed to this Friday as an important moment for the bond market, as the Federal Reserve's Jackson Hole conference gets under way with speeches from both Fed Chairwoman Janet Yellen and European Central Bank President Mario Draghi.

With investors skeptical that the Fed will raise interest rates again this year following a run of soft inflation data, there is a risk they could be surprised if Ms. Yellen argues in favor of tighter monetary policy, analysts say.

Similarly, any hint by Mr. Draghi that the ECB could start trimming asset purchases meant to stimulate the eurozone economy could also cause investors to sell government debt.

Write to Sam Goldfarb at sam.goldfarb@wsj.com

(END) Dow Jones Newswires

August 22, 2017 15:58 ET (19:58 GMT)