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Treasuries Show Modest Move Back To The Upside

After initially showing a lack of direction, treasuries moved modestly higher over the course of the trading session on Tuesday.

Bond prices bounced back and forth across the unchanged line in morning trading before climbing more firmly into positive territory in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.4 basis points to 1.909 percent.

With the decrease on the day, the ten-year yield gave back ground after ending last Friday's trading at its highest closing level in over three months.

Treasuries moved to the upside after President Donald Trump delivered a highly anticipated speech at the Economic Club of New York and provided few details about the state of trade talks between the U.S. and China.

Trump claimed the Chinese are "dying to make a deal" and an agreement is "close," although investors had been hoping for more substantive comments from the president.

The president said a significant phase one trade deal with China "could happen soon" but stressed that he would only accept an agreement that is good for U.S. companies and workers.

Trump later denied that his trade war with China is hurting industry or causing uncertainty and threatened further increases in tariffs if a deal is not reached.

The comments from Trump spark some renewed uncertainty about a U.S.-China trade deal, increasing the appeal of safe havens like treasuries.

Looking ahead, a report on consumer price inflation may attract some attention on Wednesday along with Congressional testimony from Federal Reserve Jerome Powell.

Trump renewed his attacks on the Fed during his remarks, claiming the economy and the markets would be even stronger if the central bank would take his advice and slash interest rates further.

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