BOND REPORT: Treasury Yields Slightly Higher As Focus Returns Back To Tax Bill

Treasury yields were up slightly on Monday as the White House signaled its willingness to leave out a controversial provision to get the tax bill passed.

What are yields doing?

The benchmark 10-year Treasury note yield rose a basis points to 2.354%. The 2-year note yield was also little changed at 1.718%. The 30-year bond yield added a basis points to 2.790%.

Bond prices move in the opposite direction of yields.

What's driving markets?

President Donald Trump said he was willing to drop the repeal of the health care provision to get the tax bill passed, after Senator Susan Collins, a Maine Republican, said she held doubts about the bill's inclusion of a repeal of the Obamacare mandate. The Republicans can only afford a few dissenters as the GOP only have a small minority in the GOP and the Democrats are expected to vote against the tax plan.

See: Obamacare mandate repeal may not be blow supporters fear (http://www.marketwatch.com/story/obamacare-mandate-repeal-may-not-be-blow-supporters-fear-mueller-interviews-with-white-house-officials-coming-up-2017-11-20)

With little economic data ahead of the release of the Federal Open Market Committee's minutes on Wednesday, investors eyed the geopolitical strains in Germany. Chancellor Angela Merkel was unable to form a majority coalition government, raising the prospect of a minority government or a new general election. Treasury yields initially fell, but the impact was all but shrugged off by the beginning of the U.S. trading session.

What did market participants say?

"Global markets were surprised by the failure of Angela Merkel to form a new coalition government after a convincing win in September. Despite the surprise, interest rates reacted for all of about four hours before deciding something would work out," said Jim Vogel, interest-rate strategist for FTN Financial.

What else is on investors' radar?

What other markets moved?

European bond yields were lower across the board. The French 10-year government bond shed 2 basis points to 0.694%, while the German 10-year government bond yield lost a basis points to 0.354%.

(END) Dow Jones Newswires

November 20, 2017 09:24 ET (14:24 GMT)