NEW YORK: US Treasuries fell on Tuesday, with prices pressured by institutional investors readying for a big corporate bond deal by leading retailer Amazon.
Treasuries, which posted strong returns during November, also declined on Monday, when Medtronic Inc priced $17 billion of senior notes. That deal included a large portion of long-dated bonds.
"There is a lot of corporate issuance that's being hedged and that's applying a lot of pressure," said Sean Murphy, a Treasuries trader at Societe Generale in New York.
Hedging against expected exposure to corporate deals can at times pressure bonds, as investors conduct trades known as "rate-locking" that involves selling Treasuries to offset coming purchases of corporate bonds.
According to IFR, a unit of Thomson Reuters, Bank of America and other banks working for Amazon were expected to price on Tuesday a five-part senior unsecured offering for the online retailer.
Much of the deal, whose size was unknown, was expected to be long-term debt, according to Murphy.
Yields on 30-year Treasuries topped 3 percent briefly after data showed U.S. construction spending in October was healthier than forecast. The bond was last off more than one point and yielding 2.9960 percent, according to Reuters data.
The 10-year Treasury was last off 15-1/2 to yield 2.2729 percent.
This week's declines in Treasuries follow strong gains in long maturities during November, according to Kevin Horan, director of fixed income indices at S&P Dow Jones Indices.
Ten-year Treasuries tracked by the S&P/BGCantor Current 10 Year U.S. Treasury Bond Index also tightened by 16 basis points, Horan said.
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