Treasuries Move Back To The Upside Following Retail Sales Data

(RTTNews) - Following the pullback seen in the previous session, treasuries showed a strong move back to the upside during trading on Tuesday.

Bond prices advanced early in the session and climbed more firmly into positive territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.2 basis points to 4.217 percent.

The ten-year yield largely offset the 6.6 basis point increase seen on Monday, closing just off last Friday's two-month closing low.

The rebound by treasuries came following the release of a Commerce Department showing U.S. retail sales inched up by slightly less than expected in May.

The Commerce Department said retail sales crept up by 0.1 percent in May after dipping by a revised 0.2 percent in April.

Economists had expected retail sales to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

Excluding an increase in sales by motor vehicle and parts dealers, retail sales edged down by 0.1 percent in May after slipping by a revised 0.1 percent in April.

Economists had expected ex-auto sales to climb by 0.2 percent, matching the increase originally reported for the previous month.

"The much anticipated retail sales report pushed Treasury yields lower as it came in weaker than estimates, but it was the downward revision for two previous months that has analysts concerned that lower and middle income wage earners are under pressure from both prices and higher prices," said Quincy Krosby, Chief Global Strategist for LPL Financial.

Meanwhile, the Federal Reserve released a separate report showing industrial production increased by much more than expected in the month of May.

The Fed said industrial production jumped by 0.9 percent in May after coming in unchanged in April. Economists had expected industrial production to rise by 0.3 percent.

Following the Juneteenth holiday on Wednesday, trading on Thursday may be impacted by reaction to reports on weekly jobless claims and housing starts.