Treasury yields fall slightly on early Wednesday’s trade, but were off their lows after updated vaccine news from Pfizer and BioNTech.

What are Treasurys doing?

The 10-year Treasury note yield TMUBMUSD10Y, 0.857% fell 1.2 basis points to 0.862%, while the 2-year note rate TMUBMUSD02Y, 0.177% was flat at 0.175%. The 30-year bond yield TMUBMUSD30Y, 1.596% slipped 1.9 basis points to 1.605%.

What’s driving Treasurys?

Pfizer PFE, +1.84% and its German partner BioNTech BNTX, -5.01% on Wednesday said a continuing trial of its experimental coronavirus vaccine indicated that the drug, at 95% efficacy, was even more successful than original thought at preventing the deadly infection. The drugmakers said they would seek emergency use authorization for the COVID-19 vaccine candidate in the next few days.

The news helped to shrink overnight gains in Treasury rates, but bond yields remained lower on Wednesday.

In economic data, housing starts climbed 4.9% in October, running at an annualized pace of 1.53 million. Building permits remained steady at 1.55 million.

A few senior Federal Reserve officials will speak on Wednesday, following Chairman Jerome Powell’s call on Tuesday for additional government relief to support the economy. New York Fed President John Williams and St. Louis Fed President James Bullard are among those who will offer remarks.

Meanwhile, the Treasury Department will auction $27 billion of 20-year notes at 1 p.m. Eastern Time. The new supply can influence trading in the government bond market.

What did market participants’ say?

The reversal of the overnight bond-market rally was “attributed to further Pfizer news on the effectiveness of its vaccine and to some extent today’s [debt] supply,” said Justin Lederer, an interest-rate strategist at Cantor Fitzgerald.

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