Treasuries Move Back To The Upside On Disappointing Retail Sales Data

(RTTNews) - Treasuries showed a notable move to the upside during trading on Tuesday following the release of disappointing retail sale data.

After jumping following the release of the data, bond prices moved roughly sideways for the remainder of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.8 basis points to 2.618 percent.

With the drop, the ten-year yield partly offset the upward move seen over the past three sessions, although it remains above last Wednesday's three-month closing low.

The rebound by treasuries came following the release of a Commerce Department report showing weaker than expected retail sales growth in the month of April.

The report said retail sales edged up by 0.1 percent in April after surging up by an upwardly revised 1.5 percent in March.

Economists had expected sales to rise by about 0.4 percent compared to the 1.1 percent growth originally reported for the previous month.

Peter Boockvar, managing director at the Lindsey Group, said, "While sales in April were weaker than expected, the March upward revision helped to cushion most of the drop specifically at the 'control group' which gets plugged into GDP."

"The March upward revision will help Q1 GDP estimates but will be more than offset by a reduction to Q2," Boockvar added.

Meanwhile, traders shrugged off separate reports showing an unexpected drop in import prices in April and an increase in business inventories in March.

Another batch of economic data is scheduled to be released on Wednesday, with traders likely to keep an eye on reports on producer prices and homebuilder confidence.