NEW YORK: US long-dated Treasury debt yields on Wednesday edged higher from three-week lows hit the previous session, as risk aversion eased with a recovery in Deutsche Bank's share price and more stable global stocks.
Investors awaited Federal Reserve Chair Janet Yellen's testimony before a Congressional committee, which will be closely watched for any indication on the timing of the next interest rate hike. The Fed last week kept rates steady but flagged a December move.
David Keeble, global head of interest rates strategy at Credit Agricole in New York, said bonds such as 10-year German Bunds have benefited from an almost two percent rise in the Deutsche Bank stock price.
Germany's largest bank has been the center of attention this week as investors feared it may collapse like Lehman Brothers. Deutsche is facing a $14 billion legal battle with the US government in connection with the bank's issuance and underwriting of residential mortgage-backed securities.
Beyond Deutsche, the market is focused on Yellen, although some analysts were unsure whether she would actually comment on monetary policy.
"Yellen will likely receive some questions on monetary policy and even the election, though it's hard to know whether the market will put as much emphasis on what Yellen says with over two months before the December meeting," said Aaron Kohli, interest rates strategist at BMO Capital in New York.
"Further, given Yellen's track record, we do not expect to hear any new information regarding her expectations for the near-term path of rates."
In mid-morning trading, US benchmark 10-year Treasury notes were flat in price for a yield of 1.556.
US 30-year bonds slipped 5/32 in price, yielding 2.284 percent, up from Monday's 2.278 percent.
On the front end of the curve, US two-year notes were flat in price for a yield of 0.738 percent.
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