Mid- and long-dated US Treasuries advanced on Tuesday, while shorter-dated notes underperformed as conditions in the repurchase market for two-year securities began to ease. A decline in oil prices fueled broad buying across the Treasury market, with an even stronger rally in European bonds providing additional support; the German 10-year yield was on track for its largest one-day drop in four months. Just after 3 p.m. in New York, yields on US notes from the middle to the long end of the curve fell by 3 to 4 basis points, while short-dated yields edged slightly higher on the day, pushing the 2s10s spread and the 2s5s spread down by 4 and 3 basis points, respectively, from Friday's close. The US 10-year yield settled near 4.955%, though German and UK bonds outperformed their US counterparts over the same period.

A significant portion of the Treasury gains occurred during the London trading session, supported by the advance in European debt; however, as the US session progressed, some of those intraday gains were trimmed. Dollar swap spreads continued to widen at the long end of the curve, with the 30-year spread increasing by 1 basis point on the day. At the short end, spreads narrowed by about 1 basis point as pressure in the repo market for two-year Treasuries began to dissipate.

As of 4:59 p.m. Eastern Time, the 2-year yield stood at 4.7462%, the 5-year at 4.8271%, the 10-year at 4.951%, and the 30-year at 5.2835%. The spread between the 2-year and 10-year yields was 20.05 basis points, while the gap between the 5-year and 30-year yields measured 45.46 basis points.