Fixed income

A surge in gauges of US interest-rate volatility was also brief, with investors anticipating the Federal Reserve will leave rates unchanged at their meeting next week, amid signs of resilience in the economy.

The $13 billion auction was awarded at 4.846%, about a basis point lower than its yield in trading just before 1 p.m.

In the U.S. Treasuries market, longer-dated bonds were hit hardest, as 30-year yields climbed 8 basis points to 4.92%.

The positions in 10-year options could move closer to being in the money by the end of this week, with an array of labor-market releases ahead, culminating in Friday's government employment figures for December.

Yields gravitated back toward session lows — down three to four basis points on the day — after the December ISM manufacturing gauge unexpectedly dropped.

Yield declines were biggest for short maturities, and the 30-year increased slightly, amid expectations at year-end that the Fed was likely to cut rates further in 2026.

Options include a possible repurchase agreement — effectively a loan — with Wall Street banks or potentially tapping Argentina's $20 billion swap line with the US Treasury Department.

Holders willing to lend the note were able to do so at negative interest rates, with borrowers of the issue agreeing to sell it back the next day for less than they paid.

Later Tuesday, separate data showed US consumer confidence declined for a fifth consecutive month, reflecting ongoing concerns about inflation, tariffs and politics.

Yields on US 10-year debt were little changed at 4.14%. Two-year peers were also steady after tumbling the most in two months as the Fed lowered interest rates.

A dayslong slump in US government bonds has curbed risk appetite as traders grow cautious about the pace of monetary easing beyond Wednesday's meeting.

The wagers reflect the potential for monetary policy easing to gather pace after chair Jerome Powell's term ends in May.

The move was fueled by BOJ Governor Kazuo Ueda talking up the prospects for a rate hike, leading money markets to lift the chance of a move on Dec. 19 to around 80%, from less than 25% one week ago.

Heading into the Thanksgiving holiday-shortened week, the benchmark Bloomberg Treasuries index is on track for a small gain in November after rising in eight of the prior 10 months.

The moves come despite Fed officials including Michael Barr voicing caution on lowering borrowing costs again in December given inflation is still above target.

Bessent spoke a week after Democrats won several key elections by zeroing in concerns over the cost of living, including housing, groceries, utilities and health care. Trump himself has rebuffed such concerns.

Investors have turned to private readings such as the Challenger, Gray & Christmas Inc. report showing companies announced the most job cuts for any October in over 20 years.

Longer-dated notes led the decline, which was initially triggered by ADP Research data showing employment at US companies increased by more than forecast in October.

With debt offices slashing sales of longer-maturity debt, the recent drop in 30-year bond yields is likely to run further.

Yields on 10-year notes rose two basis points to 3.99% after falling the previous two sessions, while monetary policy-sensitive two-year notes held steady around 3.49% Wednesday morning.