Treasuries Extend Recent Pullback Off Last Week's Highs

(RTTNews) - Treasuries showed a notable move to the downside over the course of the trading day on Tuesday, extending the recent pullback off last week's highs.

After moving moderately lower in early trading, bond prices pulled back more firmly into the red in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5.9 basis points to 2.593 percent.

With the increase on the day, the ten-year yield closed higher for the fourth consecutive session, climbing further off the eleven-month closing low set last Wednesday.

Profit taking contributed to the continued pullback by treasuries, as some traders believe the recent strength in the bond markets was overdone.

Selling pressure may also have been generated by a report from the Commerce Department showing that factory orders rose by more than expected in the month of April.

The report said factory orders increased by 0.7 percent in April after jumping by an upwardly revised 1.5 percent in March. Economists had expected orders to climb by about 0.5 percent.

The Commerce Department said factory orders increased for the third consecutive month, rising to their highest level since the series was first published on a NAICS basis in 1992.

Trading on Wednesday could be impacted by the release of a slew of U.S. economic data, including reports on private sector employment, international trade, and service sector activity.

The Federal Reserve is also due to release its Beige Book, although trading activity may be somewhat subdued ahead of the European Central Bank meeting on Thursday and the release of the monthly U.S. jobs report on Friday.