Yields lower as investors gauge vaccine schedules

Most U.S. Treasury yields were lower on Tuesday as investors tried to judge how quickly vaccines could be distributed to fight the COVID-19 pandemic.

The benchmark 10-year yield was down 2.7 basis points in morning trading at 0.9014pc, close to the 0.9pc threshold it was last below on Dec. 1.

Investors seemed to trying to judge widely and quickly vaccines would be available, which will determine the pace of reopening plans and economic recovery, said Eric Jussaume, director of fixed income for Cambridge Trust. With a lack of clarity on the schedule, "Enthusiasm could be postponed a little bit," he said.

Britain on Tuesday became the first Western nation to begin a mass inoculation campaign. In the U.S. the Trump administration sought to shore up the vaccine supply, after a report that Pfizer Inc may not be able to provide more of its vaccine to the U.S. until next June because of its commitments to other countries.

Wall Street's main indexes opened lower on Tuesday as coronavirus cases surged, which also pressured Treasury yields lower as investors moved to safety.

Investors will watch the results of a U.S. Treasury auction of $56 billion worth of 3-year notes due in the early afternoon.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 76 basis points, about 2 basis points lower than on Monday's close.

The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was unchanged at 0.1429pc in morning trading.