Treasurys are getting smashed

The US Treasury complex is opening up 2017 the same way it spent much of the final two months of 2016, lower.

Early selling has taken hold as risk assets across the globe rally on the first trading day of the new year.

The weakness has run yields up as much as as 6 bps in the belly of the curve. Here's a look at the scoreboard as of 7:07 a.m. ET:

• 2-year +3.8 bps @ 1.226%
• 3-year +4.6 bps @ 1.497%
• 5-year +5.6 bps @ 1.983%
• 7-year +6.1 bps @ 2.306%
• 10-year +6.1 bps @ 2.505%
• 30-year +5.6 bps @ 3.121%

Treasurys saw significant selling in the weeks following the election amid speculation Trump will bring back inflation to the United States thanks to his protectionist trade agenda and plans for massive infrastructure spending. That selling ran Treasury yields up more than 90 basis points in longer dated yields.

While yields have come back in a bit, they still remain near their highest level in since the fall of 2014. After hitting a high of 2.63%, the 10-year has fallen back into the 2.50% area, which Morgan Stanley Strategist Matthew Hornbach called "important."

Tuesday's selling is having little impact on the yield curve as the 5-30-year spread holds at 114 bps. The curve has actually flattened from 137 bps since the election, a sign that maybe inflation won't be coming back like many are anticipating.