US Treasury debt yields fell on Wednesday with benchmark yields briefly touching the lowest in a month following stellar demand at a 10-year note sale, while President-elect Donald Trump's remarks spurred safe-haven demand for bonds. Trump's first news conference since the November 8 election contained no details on tax cuts and infrastructure spending, which were two factors that ignited a five-week global bond market selloff after his surprise presidential win.
The absence of details on these key issues Trump campaigned on during the news conference added to bids for longer-dated Treasuries with traders buying to close out some of their bearish bond bets, analysts said. "Trump's silence on tax reform and infrastructure let additional air escape from the post-election, 'hate bonds' campaign," said Jim Vogel, interest rate strategist at FTN Financial in Memphis, Tennessee.
The yield on 10-year Treasury notes was down 0.5 basis point at 2.374 percent. It traded as low as 2.329 percent, which was the lowest since November 30, following the 10-year note auction, part of this week's $56 billion in longer-dated government debt supply. The 30-year bond yield fell to a near two-month low of 2.926 percent before retracing to 2.961 percent, down 1 basis point on the day. The Treasury Department's $20 billion reopening of an older 10-year note issue brought a bid-to-cover ratio of 2.58, which was the strongest since June 2016.
The Treasury will complete this week's auctions with a $12 billion sale of 30-year bonds on Thursday. The Treasury auctioned $24 billion of 3-year notes on Tuesday. Bond purchases were underpinned earlier Wednesday by remarks from Trump during his press conference when he said pharmaceutical companies are "getting away with murder" in what they charge the government for medicines, and promised that would change, sending drugs stocks sharply lower. The weakness in the pharmaceutical sector briefly reduced gains across Wall Street and lifted demand for Treasuries, analysts said.