NEW YORK: US Treasury yields fell on Tuesday in line with their UK counterparts on chances that parliament may have to ratify a British exit from the European Union, which reduced some bets that the UK would lose access to the single market.

US bond yields pulled further away from four-month peaks set on Monday on data that showed the underlying inflation trend moderated in September. This revived expectations it may take longer than previously thought for domestic inflation to reach the Federal Reserve’s 2 percent goal, keeping the Fed on a glacial path on raising interest rates. “The initial strength came from gilts,” said Jim Vogel, interest rates strategist at FTN Financial in Memphis, Tennessee. “The inflation trade which has come in bursts has cooled a bit,” he added.

A lawyer who represents the U.K. government in its challenge over who has the right to trigger Brexit divorce talks, James Eadie, said parliament would “very likely” have to ratify any Brexit agreement. This runs counter to Prime Minister Theresa May’s hard line for a rapid exit from the EU.

A hard Brexit is seen among some investors as harmful to the British economy, making gilts less attractive. Uncertainty on how London’s High Court may rule stoked some buying of UK government debt with 10-year yields falling over 4 basis points to 1.077 percent.

Benchmark US 10-year Treasury notes were last up 4/32 in price for a yield of 1.750 percent, down 1.6 basis points and not far below a four-month peak of 1.841 percent reached on Monday. Treasury yields briefly rose earlier on Tuesday as dealers sold government bonds to hedge a large global bond issue from Saudi Arabia that they are underwriting.—Reuters