2018.05.3021:06:00UTC+00U.S. Treasury Yield Rebound as Italy Chaos Eases

U.S. government bond prices edged down on Wednesday, driving up yields, as global financial markets stabilized a day after Italy's political turmoil triggered a worldwide flight to safety that saw investors flock to U.S. Treasuries and other traditional safe-havens.

The yield on the 10-year note advanced 7 basis points to 2.842 percent, the biggest one-day increase since May 15, recovering after Tuesday notched its biggest single-day drop since June 2016. Bond prices move inversely to yields.

Earlier this month, the yield on the 10-year Treasury traded above 3 percent, but moved downward as concerns over Italy and other geopolitical worries scared investors out of so-called risky assets and into investments perceived as safe, including U.S. bonds.

Yield on the two-year note edged up 9.2 basis points on Wednesday to 2.411 percent, marking its biggest one-day increase since February 2015. Meanwhile, the yield on the 30-year Treasury, the rate on the two-year note has surged 189.4 basis points or 1.894 percentage points to 2.652 percent, notching its biggest one-day increase since 1992.

The yield on Italy's 10-year bond, called the BTP, edged down 11.8 basis points to 2.954 percent on Wednesday.

The bond markets somewhat found its footing on Wednesday after major movements on Tuesday that were mostly triggered by concerns as a political deadlock could result in a new election that would be considered as a referendum on euro membership.

Hopes that a new vote can be avoided surfaced on Wednesday following media reports that populist trio of the 5 Star Movement, the League and Brothers of Italy was pushing to establish a coalition government.