Treasuries Extend Steep Drop Seen On Monday

(RTTNews) - Following the sharp pullback seen in the previous session, treasuries saw continued weakness during trading on Tuesday.

Bond prices moved steadily lower throughout morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged up 7.4 basis points to 2.266 percent.

With the increase on the day, the ten-year yield added to the 9.7 basis point jump seen on Monday, climbing further off the one-month lows set last Friday.

The continued weakness among treasuries was partly due to a sell-off in the European bond market, which came on the heels of Eurozone inflation data.

Flash inflation data released by Eurostat showed that the annual rate of consumer price growth came in at 0.3 percent in May, more than the 0.2 percent rate expected by economists.

Speculation the U.S. employment report due on Friday will show stronger than expected job growth also weighed on treasuries.

While the consensus estimate calls for an increase of about 220,000 jobs in May, analysts told Reuters the "whisper number" is for an increase of 240,000 to 250,000 jobs.

Reports on private sector employment, international trade and service sector activity are likely to be in focus on Wednesday along with the Federal Reserve's Beige Book report.

Weekly jobless claims and labor productivity data is also due to be released on Thursday, although the focus is likely to remain on the monthly jobs report on Friday.