Treasuries Close Notably Lower Amid Jump In Corporate Bond Sales

(RTTNews) - After turning lower over the course of the previous session, treasuries saw some further downside during trading on Tuesday.

Bond prices came under pressure in early trading and remained stuck firmly in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 6.7 basis points to 2.285 percent.

With the increase on the day, the ten-year yield added to the gain posted on Monday, climbing further off last Friday's one-month closing low.

The weakness among treasuries was partly due to a surge in U.S. corporate bond sales, which reached an annual record amid a year-end rush.

Optimism about the global economic outlook also weighed on treasuries amid speculation about further stimulus from China.

Reports have suggested that the People's Bank of China may follow up last month's surprise interest rate cut with a reduction in banks' reserve requirements.

On the U.S. economic front, the Commerce Department released a report showing a much stronger than expected jump in construction spending in the month of October.

The report said construction spending jumped 1.1 percent to an annual rate of $971.0 billion in October from the revised September estimate of $960.3 billion. Economists had expected spending to increase by about 0.5 percent.

Strength on Wall Street also contributed to the pullback by treasuries, with stocks benefiting from a number of positive catalysts.

Economic data is likely to be in focus in Wednesday, as traders will be presented with reports on private sector employment, labor productivity and costs, and service sector activity.