U.S. Treasury prices slipped Tuesday, lifting yields a day after the 10-year yield sank to its lowest since February.

What are yields doing?

The 10-year Treasury note yield
TMUBMUSD10Y,
1.178%

rose to 1.193% compared with 1.173% at 3 p.m. Eastern on Monday, That was the lowest level for the 10-year yield, based on 3 p.m. yields, since Feb. 11, according to Dow Jones Market Data.

The 2-year Treasury note yield
TMUBMUSD02Y,
0.180%

stood at 0.18% versus 0.174% Monday afternoon.

The yield on the 30-year Treasury bond
TMUBMUSD30Y,
1.848%

rose to 1.867% compared with 1.853% Monday afternoon.

What’s driving the market?

Treasury yields extended a fall on Monday after a weaker-than-expected reading on U.S. manufacturing sector activity underlined concerns about economic growth pieaking.

Concerns about the spread of the delta variant of the coronavirus that causes COVID-19 also remain an issue. The seven-day average of daily coronavirus cases in the U.S. surpassed the peak seen last summer, CDC Director Dr. Rochelle Walensky said Monday. The seven-day moving average of new Covid cases 72,790 on Friday, according to data compiled by the CDC. However, the CDC data also shows 70% of U.S. adults have had at least one shot of a Covid-19 vaccine.  Nevertheless, mask mandates have been reintroduced in parts of the U.S., including Louisiana and San Francisco. China has also announced mass testing in Wuhan, the city where the disease first emerged.

The U.S. Treasury Department said Monday it expects to borrow $673 billion in the third quarter, which is $148 billion lower than previously estimated. The decline was driven, in part, by lower outlays than expected. The updated forecast includes an end-of-quarter cash balance of $750 billion.

Data on U.S. June factory orders is due at 10 a.m. Eastern.

What are analysts saying?

“The question is whether the bond market is sensing something sinister ahead or whether the latest moves can be explained away as technical. There are solid arguments on both sides,” said Marios Hadjikyriacos, senior investment analyst at XM, in a note.

The spread of the delta variant is adding to jitters about peak growth, but aggressive central bank buying of bonds is also a factor as some players, including banks, are forced to buy “truckloads of Treasurys” as top-tier collateral, he said.

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