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Treasuries Regain Ground Ahead Of Fed Announcement

After moving notably lower over the two previous sessions, treasuries regained some ground during trading on Tuesday.

Bond prices fluctuated early in the session but managed to remain in positive territory in afternoon trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 1.8 basis points to 1.835 percent.

With the pullback on the day, the ten-year yield gave back ground after ending yesterday's trading at its highest closing level in well over a month.

The rebound by treasuries came as traders looked ahead to the Federal Reserve's highly anticipated monetary policy announcement on Wednesday.

The Fed is widely expected to cut interest rates by another quarter point, although traders may wait to see if the central bank follows through and provides any clues about future rate cuts.

CME Group's FedWatch Tool is currently pointing to a 97.3 percent chance that the Fed will lower rates by 25 basis points.

In U.S. economic news, the Conference Board released a report showing consumer confidence unexpectedly edged lower in the month of October, although the drop came from an upwardly revised level in the previous month.

The Conference Board said its consumer confidence index dipped to 125.9 in October from an upwardly revised 126.3 in September.

Economists had expected the consumer confidence index to climb to 128.5 in October from the 125.1 originally reported for the previous month.

Meanwhile, a separate report released by the National Association of Realtors on Tuesday showed another significant increase in pending home sales in the U.S. in the month of September.

NAR said its pending home sales surged up by 1.5 percent 108.7 in September after spiking by 1.4 percent to a revised 107.1 August. Economists had expected pending home sales to climb by 0.9 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The Fed announcement is likely to be in the spotlight on Wednesday, overshadowing reports on private sector employment and third quarter GDP.

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