Treasury yields rise

US Treasury yields rose on Tuesday as investors snapped up equities on improved outlook on corporate profits, trimming their safe-haven demand for bonds spurred by US President Donald Trump's protectionist trade stance.
The rise in bond yields, which reversed Monday's decline, brought only a moderate bid to a $26 billion auction of two-year notes, part of this week's $88 billion in coupon-bearing US government debt supply, analysts said.
"We are mostly in a holding pattern until we get more clarity on the fiscal side," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.
On Tuesday, Trump urged US carmaker executives to build more vehicles domestically and signed executive orders to speed up the building of the Keystone XL and Dakota oil pipelines.
These moves aimed to create jobs and investments followed Trump's actions on Monday to revamp deals with its Asian and North American trading partners which investors fear would hurt exports and raise business costs.
Treasury yields initially climbed in step with their European counterparts, following a high court ruling on Britain's decision to bolt from the European Union and encouraging data on euro zone manufacturing data.
The court ruled Prime Minister Theresa May must get parliament's approval before she begins Britain's formal exit from the EU. It reduced the chances of a "hard Brexit" which Britain would embark on a quick divorce from the economic bloc, analysts said.
Britain's possible swift exit from the EU is seen as a drag on Europe's and its own economy.
"What this vote does is that it creates a lot of friction in the process. The likelihood of a hard Brexit outcome has diminished," said Bruno Braizinha, interest rate strategist at SG Corporate & Investment Banking in New York.
The yield on benchmark 10-year Treasury notes was up 6 basis points at 2.465 percent. German 10-year Bund and British 10-year Gilt yields were up about 4 basis points.
The S&P 500 and Nasdaq hit record highs. Bond yields' early increase was also underpinned by IHS Markit's Euro Zone Flash Composite Purchasing Managers' Index, seen as a gauge on regional growth, only dipped from December's five-year high of 54.4 to 54.3.
The ratio of bids to the two-year notes offered was 2.68, up from 2.44 at the prior auction which was the weakest since December 2008.