(Reuters) - Treasuries rallied on Tuesday as the market reopened after Monday’s U.S. public holiday and investors sought out safer assets to shelter from the general atmosphere of uncertainty over Sino-U.S. trade talks and Brexit.
The ten-year yield was down 8 bps at 1.675% US10YT=RR by 1045 GMT, after rising on Friday to a two-week high on the back of signs Beijing and Washington might reach a trade deal and newfound optimism over a Brexit agreement between Britain and the European Union.
Bond markets rallied on Monday however as caution crept in on both fronts and yields are broadly lower across the board on Tuesday.
Two-year Treasury yields too fell 7 bps to 1.543% US10YT=RR.
U.S. Federal Reserve official James Bullard, who last month voted for a big half-point rate cut, said meanwhile in London he hoped the Fed’s two recent rate cuts would have staved off a lengthy inversion of the 2-10-year bond yield curve, that has preluded U.S. recessions in the past.
The yield curve has since disinverted.
He said the cuts could be reversed if the economic outlook improved.
Reporting by Sujata Rao; editing by Yoruk Bahceli