U.S. Treasury yields rose on Tuesday worries about the banking sector calmed after a turbulent few weeks and investors awaited the start of the Federal Reserve's next meeting.
At 5:32 a.m. ET, the yield on the 10-year Treasury was trading at 3.5261% after rising by close to five basis points. The 2-year Treasury yield was up by over 12 basis points to 4.0508%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Confidence in the banking sector improved slightly as investors digested the implications of Credit Suisse's takeover by UBS. The deal was put together over the weekend with the help of Swiss authorities, who pledged financial support, among other measures designed to secure Credit Suisse's acquisition.
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The reaction from authorities eased some investor concerns about the stability of the financial system. However, the takeover has also threw up some issues, such as holders of additional tier 1 bonds seeing $17 billion of their investments wiped out, which could lead to legal action.
Regional banks in the U.S. also appeared to recover slightly, with the SPDR Regional Banking ETF (KRE) closing higher on Monday and last being up in pre-market trading.
The Federal Reserve's latest meeting is due to begin on Tuesday, with the latest interest rate decision expected to be announced Wednesday. Investors are expecting a 25 basis point rate hike.
Money Report
They are also hoping for fresh guidance about the economic outlook and hints about the central bank's future policy. That includes whether officials will hike rates more than expected and keep them higher for longer, which they had hinted at before the recent banking sector turmoil.
