US revenue rises after Russia rushes into Ukraine

by Herbert Lash

NEW YORK (Reuters) – A sharp rise in US Treasuries, fueled by demand for safe-haven assets after Russia ordered troops into separatist regions in eastern Ukraine, was reversed on Tuesday, as investors took a more cautious approach to assessing new developments. .

Germany has frozen a new gas pipeline and Britain has imposed sanctions on Russian banks in response to Russia’s recognition of two independent Ukrainian regions.

* The 10-year US Treasury yield rose 2.1 basis points to 1.951%, after an early morning price hike pushed yields below 1.85%.

* Yields move in the opposite direction to bond prices.

* The yield curve, which measures the difference between two- and 10-year Treasury yields and is seen as a measure of economic outlook, was flattened to 42.1 basis points.

Tom de Galoma, managing director of Seaport Global Holdings, said the overnight trip to high-quality assets has been halted as the market sees such an extreme situation as a likely selling opportunity.

* De Galoma said: “What surprises me is that we seem to give a lot of credibility to this situation in Ukraine.” “I don’t think this is a victory for Russia. With all these sanctions lifted, it will not help them financially,” he said.

* Markets expect interest rates to rise as the Federal Reserve is expected to raise its rate in March, and central banks in Britain, Canada, Australia and New Zealand want to do the same to fight inflation.

* The Treasury is set to sell $52 billion of two-year bonds in an auction, the results of which will be announced on Tuesday.

* The two-year bond yield, which is normally in line with interest rate expectations, rose 5.8 basis points to 1.530%. (Reporting by Herbert Lash, edited in Spanish by Javier López de Lleida)