Treasuries Regain Ground Ahead Of Key Economic Data, Fed Minutes

Treasuries showed a notable move to the upside during trading on Tuesday, regaining ground following recent weakness.

Bond prices gave back ground after an early rally but remained firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 8.6 basis points to 3.793 percent.

The rebound by treasuries was partly due to bargain hunting, with the ten-year yield giving back ground after reaching its highest intraday level in well over a month last Friday.

Traders may also have looked to the relative safety of bonds ahead of the release of some key economic data later this week, including the closely watched monthly jobs report on Friday.

Reports on manufacturing and service sector activity may also attract attention in the coming days along with the minutes of the latest Federal Reserve meeting.

A report released by the Commerce Department this morning unexpectedly showed a modest increase in U.S. construction spending in the month of November.

The Commerce Department said construction spending crept up by 0.2 percent to an annual rate of $1.808 trillion in November after edging down by 0.2 percent to a revised rate of $1.803 trillion in October.

The uptick surprised economists, who had been expecting construction to decrease by 0.4 percent compared to the 0.3 percent dip originally reported for the previous month.

Trading on Wednesday may be impacted by reaction to a report on manufacturing activity, although trading may be somewhat subdued ahead of the afternoon release of the Fed minutes, which could impact the outlook for interest rates.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT