Yields fall, slightly soft demand for record five-year note sale

• Benchmark 10-year note yields fell two basis points to 0.680%.
• The yields have traded in a range from 0.543% to 0.785% since the beginning of April.

NEW YORK: US Treasury yields fell on Wednesday but held in their recent tight range, while the Treasury sold a record amount of five-year notes to relatively light demand.

Yields rose earlier in the day after the European Commission unveiled a plan to borrow on the market and then disburse to European Union countries 750 billion euros  ($823 billion) in grants and loans to help them recover from their coronavirus-related economic slumps.

But that reversed after U.S. stocks tumbled from the open. They clawed back most losses during the day.

"There was a bit of a retracement in some of the risk appetite and sentiment," said Jon Hill, an interest rate strategist at BMO Capital Markets.

Benchmark 10-year note yields fell two basis points to 0.680%.

The yields have traded in a range from 0.543% to 0.785% since the beginning of April.

That range reflects investor uncertainty over whether there will be a new uptick in the spread of the novel coronavirus and how soon the U.S. economy will be able to recover.

"That's the uncertainty that's keeping everything in a tight range," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.

New York Federal Reserve Bank President John Williams said Wednesday that officials are evaluating which steps to take to support the economy, with options including yield curve control.

The Treasury sold a record $45 billion in five-year notes on Wednesday to slightly soft demand.

It comes after a solid sale of a record $44 billion in two-year notes on Tuesday.

The Treasury will also sell $38 billion in seven-year notes on Thursday.

The U.S. government has been increasing the size of its debt auctions as it finances spending meant to blunt the economic impact of business shutdowns aimed at stemming the spread of the coronavirus.