Treasuries Close Moderately Higher Amid Optimism About Stimulus

(RTTNews) - After ending the previous session slightly lower, treasuries moved back to the upside over the course of the trading day on Monday.

Bond prices moved steadily higher in morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 2.678 percent.

The strength among treasuries was partly due to renewed optimism that the Federal Reserve is likely to leave its stimulus program intact for the foreseeable future.

Traders continued to react positively to Fed Chair nominee Janet Yellen's dovish comments at her confirmation hearing last week.

Buying interest was also generated by a report from the National Association of Home Builders showing a somewhat disappointing reading on homebuilder confidence.

The report said the NAHB/Wells Fargo Housing Market Index came in at 54 in November, unchanged from the downwardly revised reading for October.

Economists had expected the index to come in unchanged compared to the 55 originally reported for the previous month.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "Bottom line, the index held at the lowest since June and is 4 points off the August peak as higher interest rates have worked their way into the buying habits of potential purchasers at the same time sale prices are higher, income growth is mediocre, and lending standards remain tight."

Trading activity on Tuesday may be somewhat subdued amid a lack of major U.S. economic data and ahead of a speech from Fed Chairman Ben Bernanke after the close of trading.