U.S. Treasury yields slid on Tuesday as tensions between Ukraine and Russia increased, while investors awaited new data.
At 6:41 a.m. ET, the yield on the 10-year Treasury was lower by 5 basis points at 4.365%. The 2-year Treasury was also down by 5 basis points at 4.234%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Russian President Vladimir Putin warned the U.S. on Tuesday that the threshold for the use of nuclear weapons had lowered. Under the new doctrine, Russia would consider using such weaponry if it — or allies — were met with "with the use of conventional weapons that created a critical threat to their sovereignty and (or) their territorial integrity."
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The new stance comes after President Joe Biden allowed Ukraine to use U.S. weapons to strike inside Russia. Bloomberg News also reported, citing RBC Ukraine, that Ukraine hit Russia with U.S.-made missiles for the first time.
On the data front, housing construction figures for October are due Tuesday, with existing home sales numbers due out Thursday. November's flash S&P Global Composite PMIs, which track trends across the manufacturing and services sectors, will be published on Friday.
The data should give clues as to the strength of the U.S. economy ahead of Trump's second term. Yields have soared following the election with traders betting that Trump's pro-business policies and tax cuts will boost economic growth.
Money Report
Traders also kept an eye on Washington as Wall Street assessed Trump's potential picks for Treasury Secretary.
"The relevance of the pick for financial markets will probably be how the US Treasury market reacts. A candidate with proven reliability will be well-received by the bond markets, while those with less experience – or perhaps a candidate that will offer less of a counterweight to some of President-elect Trump's plans – could see the long end of the US Treasury market sell-off and perhaps even soften the dollar too," ING economists wrote in a note Tuesday.
Those reported to be in the running include Scott Bessent, founder of Key Square Group, and billionaire businessman Howard Lutnick, the Trump transition chair who has received the blessing of Trump confidante Elon Musk.
— CNBC's Jeff Cox contributed to this report.
