Treasuries Give Back Ground Following Two-Day Surge

(RTTNews) - After moving sharply higher over the two previous sessions, treasuries showed a notable move back to the downside during trading on Tuesday.

Bond prices came under pressure early in the session and slide more firmly into negative territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.2 basis points to 4.544 percent.

The pullback by treasuries came as traders cashed in on the strong upward move seen last Thursday and Friday, which saw the ten-year yield plunged by 16.5 basis points.

On the U.S. economic front, a report released by the Federal Reserve Bank of New York showed a turnaround by regional manufacturing activity in the month of February.

The New York Fed said its general business conditions index jumped to a positive 5.7 in February from a negative 12.6 in January, with a positive reading indicating growth. Economists had expected the index to climb to a negative 1.0.

Meanwhile, the report said optimism about the outlook for conditions over the next six months dropped significantly, with the index for future business activity slumping to 22.2 in February from 36.7 in January.

A separate report released by the National Association of Home Builders showed homebuilder confidence in the U.S. has unexpectedly deteriorated in the month of February.

The report said the NAHB/Wells Fargo Housing Market Index slumped to 42 in February after inching up to 47 in January. Economists had expected the index to come in unchanged.

A report on housing starts may attract attention on Wednesday along with the minutes of the latest Federal Reserve meeting, which may shed additional light on the outlook for interest rates.