Treasuries Moved Modestly Higher Ahead Of Fed Announcement

(RTTNews) - After coming under pressure over the course of the previous session, treasuries moved modestly higher during trading on Tuesday.

Bond prices moved to the upside in morning and early afternoon trading but gave back some ground going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 2.681 percent.

The modest strength among treasuries was partly due to lingering concerns about the situation in Ukraine despite Russian President Vladimir Putin's claims that he does not plan to seize any other regions of the country following the annexation of Crimea.

Reports that a Ukrainian serviceman was killed by masked gunmen at a military facility on the outskirts of the Crimean capital Simferopol added to the worries.

Ukrainian Prime Minister Arseny Yatseniuk claimed the incident is shifting the conflict from a political one to a military one.

Bond traders were also looking ahead to the announcement of the Federal Reserve's latest monetary policy decision on Wednesday.

The Fed is widely expected to announce plans to scale back its asset purchase program by another $10 billion to $55 billion per month.

Following the announcement at about 2 pm ET, Janet Yellen is scheduled to hold her first press conference as Fed Chair at about 2:30 pm ET.

On the economic front, the Commerce Department released a report this morning showing that housing starts fell modestly in February but from a notably upwardly revised level in January.

A separate report released by the Labor Department showed a modest increase in consumer prices in the month of February.

Trading activity on Wednesday may be somewhat subdued in the lead-up to the Fed announcement, with no major U.S. economic reports scheduled to be released.