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Treasuries Close Modestly Lower Following Lackluster Session

Treasuries fluctuated over the course of the trading session on Tuesday before ending the day modestly lower.

Bond prices bounced back and forth across the unchanged line in morning trading before settling in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.9 basis points to 1.304 percent.

The downturn in treasuries seemed to coincide with the release of a report from the Conference Board showing a substantial deterioration in consumer confidence in the month of August.

The Conference Board said its consumer confidence index tumbled to 113.8 in August from a downwardly revised 125.1 in July.

Economists had expected the consumer confidence index to drop to 123.0 from the 129.1 originally reported for the previous month.

With the bigger than expected decrease, the index slumped to its lowest level since hitting 95.2 in February of 2021.

"Concerns about the Delta variant—and, to a lesser degree, rising gas and food prices—resulted in a less favorable view of current economic conditions and short-term growth prospects," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

She added, "While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead."

Reports on private sector employment and manufacturing activity may attract attention on Wednesday, although trading activity may remain somewhat subdued ahead of the release of the more closely watched monthly jobs report on Friday.

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