U.S. Treasury yields moved unevenly on Tuesday as the curve flattened: short-term yields rose more than 1 basis point, while yields on longer-dated bonds fell as their prices advanced. The 2s10s and 5s30s spreads ended at intraday lows. According to Sina Finance, falling oil prices supported intermediate- and long-term Treasuries.

Just after 3 p.m. New York time, the 2-year yield was up 1 basis point, while yields from the 7-year tenor through the long end fell by 2 to 4.5 basis points. The 2s10s and 5s30s spreads narrowed by 3.5 and 4 basis points, respectively, from Monday’s close. The 10-year yield was near the middle of its intraday range at about 5.115%.

Brent crude drew attention in the morning. As traders weighed progress in U.S.-Iran talks, oil prices swung sharply and drove Treasury trading.

Money-market pricing for Federal Reserve policy was broadly steady during the session, with about 5 basis points of rate hikes priced for the October 28 meeting and about 25 basis points by year-end.

Treasury options saw demand for downside protection for a second consecutive day, with bets on the 10-year yield reaching 5.3% by month-end. Demand continued for TY Week 5 104.00 puts, with about 100,000 positions established over the past two trading days. Early futures trading included a large purchase of the October SOFR-federal funds rate basis. At 3 p.m. New York time, Treasury futures volume was about 80% of its 20-day average.

As of 4:42 p.m. U.S. Eastern Time, the 2-year yield was up 0.6 basis points at 4.7783%; the 5-year yield was down 1.3 basis points at 4.9273%; the 10-year yield was down 2.9 basis points at 5.1105%; and the 30-year yield was down 4.5 basis points at 5.422%. The 5s30s spread narrowed about 3.3 basis points to 49.3 basis points, and the 2s10s spread narrowed about 3.3 basis points to 33.02 basis points.