By Sunny Oh

Treasury prices rose on Tuesday, pushing yields lower, after a deal to raise the U.S. government's borrowing limit gave a lift to stocks and weighed on demand for haven assets.

What are Treasurys doing?

The 10-year Treasury note yield was up 0.9 basis point to 2.050%, while the 2-year note rate rose 1.7 basis points to 1.831%. The 30-year bond yield was mostly unchanged at 2.574%. Debt prices move in the opposite direction of yields.

What's driving Treasurys?

Appetite for government bonds waned after the White House reached a two-year agreement with Congressional Democrats to increase federal spending and increase the government's debt ceiling. The deal still needs to be voted on by the House and the Senate, and then signed by President Trump.

Japan's Topix index recorded a gain of 0.8%, while futures for the S&P and the Dow Jones Industrial Average indicated U.S. stocks were on track to open higher, driving down demand for fixed-income alternatives.

In Europe, Boris Johnson, counted in the pro-Brexit camp, was elected to become the U.K.'s next prime minister, with Theresa May set to resign this week. He beat out Jeremy Hunt in the contest to become the next head of the ruling Conservative Party. Investors say Johnson's election increases the likelihood of a no-deal Brexit that's seen disrupting trade pacts and potentially complicating financial transactions.

In economic data, existing home sales for June will be released at 10 a.m. Eastern. Economists expect a reading of 5.33 million, from an annualized pace of 5.34 million in the previous month.

What did market participants' say?

"With a new spending deal and a 2-year debt ceiling extension in sight this morning, the curve is flatter as short-term yields anticipate a rapid burst of bill supply," wrote Jim Vogel, an interest-rate strategist at FTN Financial.

"The more important threat to bond market supply stems from pitifully slow growth in federal revenues during an economic expansion," said Vogel.

(END) Dow Jones Newswires

July 23, 2019 08:25 ET (12:25 GMT)