Treasuries Extend Recent Upward Trend On Mixed Economic Data

(RTTNews) - Treasuries moved notably higher over the course of the trading day on Tuesday, extending the upward trend seen over the past few sessions.

Bond prices moved steadily higher for much of morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.5 basis points to 2.696 percent.

The ten-year yield closed lower for the fourth consecutive session, pulling back further off the two-month closing high set last Wednesday.

The continued strength among treasuries came on the heels of the release of a mixed batch of economic data, including a report from the Conference Board that unexpectedly showed a continued drop in consumer confidence in November.

The Conference Board said its consumer confidence index dipped to 70.4 in November from an upwardly revised 72.4 in October.

The decrease came as a surprise to economists, who had expected the index to climb to 72.9 from the 71.2 originally reported for the previous month.

Meanwhile, the Commerce Department released a report showing that building permits jumped to a five-year high in October.

The report said building permits climbed 6.2 percent to an annual rate of 1.034 million in October from 974,000 in September. Economists had expected building permits to come in at an annual rate of 930,000.

The Commerce Department noted that the release of data on housing starts was once again delayed as a result of the recent government shutdown.

A separate report from Standard & Poor's showed that home prices in major U.S. metropolitan areas rose by slightly more than anticipated in the month of September.

Treasuries held on to their gains following the release of the results of the Treasury Department's auction of $35 billion worth of five-year notes.

The five-year note auction drew a high yield of 1.34 percent and a bid-to-cover ratio of 2.61, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.67.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Finishing off this week's series of long-term securities auctions, the Treasury is due to sell $29 billion worth of seven-year notes on Wednesday.

Trading on Wednesday could also be impacted by the release of a slew of economic data, including reports on weekly jobless claims, durable goods orders, and Chicago-area business activity.