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Treasuries Move Back To The Upside Ahead Of Fed Minutes

Following the pullback seen over the two previous sessions, treasuries regained some ground during trading on Tuesday.

Bond prices moved to the upside early in the session and remained firmly positive throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.7 basis points to 1.561 percent.

The rebound by treasuries came as traders expressed some uncertainty ahead of the release of the minutes of the Federal Reserve's late-July meeting on Wednesday.

The minutes, along with Fed Chairman Jerome Powell's speech on Friday, may shed additional light on the outlook for interest rates.

The Fed cut interest rates by 25 basis points last month and CME Group's FedWatch tool currently indicates a 95 percent chance of another 25 basis point rate cut in September.

Powell suggested that the July rate cut should not be seen as "the beginning of a lengthy cutting cycle," but President Donald Trump has been putting intense pressure on the Fed to continue cutting rates.

Trump claimed in a post on Twitter on Monday that the U.S. economy is very strong in spite of Powell's "horrendous lack of vision."

"The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well," Trump tweeted.

He added, "If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!"

The minutes of the latest Fed meeting are likely to be in focus on Wednesday, as traders look for clues about the likelihood of further interest rate cuts.

Following two quiet days on the U.S. economic front, traders are also likely to keep an eye on a report on existing home sales in July.

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