Treasuries Extend Upward Trend Following U.S. Economic Data

(RTTNews) - Treasuries showed a notable move to the upside during trading on Tuesday, extending the upward trend seen over the past several sessions.

Bond prices advanced early in the session and remained firmly positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 3.6 basis points to 4.002 percent.

With the continued decrease on the day, the ten-year yield dropped to its lowest closing level since closing below 4 percent in late October.

Treasuries continued to benefit from renewed optimism about the outlook for interest rates following recent dovish comments from Federal Reserve officials as well as the latest U.S. economic data.

The Commerce Department released a report this morning showing retail sales in the U.S. increased by less than expected in September, while a separate report released by the Labor Department showed producer prices in the U.S. increased in line with estimates in September.

Meanwhile, payroll processor ADP released a report showing U.S. private sector employers shed an average of 13,500 jobs per week in the four weeks ending November 8th compared to an average loss of 2,500 jobs in the previous four-week period.

The Conference Board also released a report showing a substantial deterioration by U.S. consumer confidence in the month of November.

The report said the consumer confidence index tumbled to 88.7 in November from an upwardly revised 95.5 in October. Economists had expected the consumer confidence index to dip to 93.3 from the 94.6 originally reported for the previous month.

CME Group's FedWatch Tool indicates the chances the Fed will cut interest rates by another quarter point next month have surged to 82.7 percent from 50.1 percent a week ago.

Treasuries saw continued strength as the Treasury Department revealed this month's auction of $70 billion worth of five-year notes attracted slightly above average demand.

Trading activity on Wednesday may be somewhat subdued due to the Thanksgiving Day holiday on Thursday, although reports on durable goods orders and weekly jobless claims are still likely to attract attention.