Treasuries Close Roughly Flat After Seeing Early Strength

(RTTNews) - After initially extending yesterday's upward move, treasuries gave back ground over the course of the trading session on Tuesday.

Bond prices pulled back well off their early highs, eventually ending the day roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 3.789 percent after hitting a low of 3.738 percent.

Treasuries initially benefited from the release of separate reports showing a smaller than expected increase in retail sales and an unexpected decrease in industrial production.

The data added to recent optimism about the Federal Reserve nearing the end of its interest rate hiking cycle.

The Commerce Department said retail sales edged up by 0.2 percent in June after climbing by an upwardly revised 0.5 percent in May.

Economists had expected retail sales to advance by 0.5 percent compared to the 0.3 percent growth originally reported for the previous month.

Excluding a modest increase in sales by motor vehicles and parts dealers, retail sales still rose by 0.2 percent in June after rising by an upwardly revised 0.3 percent in May.

Economists had expected ex-auto sales to increase by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the Fed said industrial production slid by 0.5 percent in June, matching the downwardly revised decrease in May.

Economists had expected production to come in unchanged compared to the 0.2 percent dip originally reported for the previous month.

The National Association of Home Builders also released a report on Tuesday showing an uptick in U.S. homebuilder confidence in the month of July.

The report said the NAHB/Wells Fargo Housing Market Index inched up to 56 in July from 55 in June. The slight increase matched economist estimates.

The housing market index increased for the seventh straight month, reaching its highest level since hitting 67 in June 2022.

Following a busy day on the U.S. economic front, the calendar is relatively quiet on Wednesday, although a report on new residential construction may still attract some attention.