spreads

basically govt would want to borrow to reduce the deficits , and they will borrow at higher yields (lower bond prices) in an auction process, typically the govt at the beginning of the year provides a borrowing calendar wherein it forecasts an expected deficit and expected borrowing .

as well explained by others , the effect of lower deficit makes govt to borrow less which would reduce the supply of bonds in the market thereby lower yields (higher prices) . when the interest rates are lower investors would flee off to , which causes capital outflow and domestic currency depreciation