Treasuries Close Modestly Higher Ahead Of Bernanke Testimony

(RTTNews) - Treasuries moved modestly higher during trading on Tuesday, extending the upward trend seen over the past few sessions.

Bond prices moved to the upside in early trading and hovered in positive territory throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.4 basis points to 2.532 percent.

With the modest drop on the day, the ten-year yield pulled back further off the nearly two-year highs it set earlier this month.

The modest strength among treasuries came ahead of Federal Reserve Chairman Ben Bernanke's testimony before the House Financial Services Committee on Wednesday.

Traders seemed to be expressing optimism that Bernanke will attempt to ease concerns that the Fed will begin scaling back its stimulus program before the economy has shown significant signs of stability.

Bernanke is also likely to reiterate recent remarks stressing that monetary policy will remain accommodative even as the central bank starts to taper its asset purchase program.

Meanwhile, traders largely shrugged off the latest batch of economic data, including reports showing that consumer prices and industrial production both rose by a little more than expected in June.

The National Association of Home Builders also released a report showing that homebuilder confidence unexpectedly jumped to a seven-year high in July.

While Bernanke's remarks are likely to be in focus on Wednesday, the Commerce Department is also scheduled to release its monthly report on housing starts.

Later in the day, the Fed is also due to release its Beige Book, which consists of anecdotal evidence of economic conditions in each of the twelve Fed districts.