20.11.201723:08:00UTC+00U.S. Yields Rally as Investors’ Focus Back on Tax Bill

U.S. government prices retreated, driving yields up as the White House expressed its willingness to allow legislators to remove a controversial provision from Senate tax bill if it would improve the prospects for an approval.

Yield on the two-year Treasury note advanced 2.6 basis points to 1.754 percent, its highest level since October 2008. The yields on the shorter maturity note extended its persistent increase, rising for the eighth consecutive day in the last 10 trading sessions.

The yield on the benchmark 10-year note advanced 1.8 basis point to 2.370 percent. Meanwhile, the 30-year bond yield was flat at 2.789 percent.

One of the main drivers of the market is the statement by the White House that it would back the withdrawal of Obamacare repeal language from the legislation in order to gain passage after Senator Susan Collins said that she was skeptical about the measure. The GOP party can only accommodate a few dissenters as Republicans have a small majority in the Senate and Democrats are expected to oppose the tax plan.

Due to the lack of economic data releases before the Fed minutes on Wednesday, investors are focusing on Germany, where Chancellor Angela Merkel's efforts to establish a coalition government collapsed. Merkel also said she would prefer to hold another election over a prospect of a minority government.