Treasuries Remain Under Pressure Amid Upbeat Economic Data

(RTTNews) - After coming under pressure over the course of the previous session, treasuries saw some further downside during trading on Tuesday.

Bond prices moved steadily lower as the abbreviated trading day progressed before closing firmly in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5.4 basis points to 2.983 percent.

The increase on the day extended a recent upward trend by the ten-year yield, which reached its highest closing level in over two years.

The continued weakness among treasuries was partly due to the release of a report from the Commerce Department showing that durable goods orders rose by much more than expected in the month of November.

The report said durable goods orders surged up by 3.5 percent in November following a revised 0.7 percent decrease in October. Economists had expected orders to increase by about 2.0 percent.

Excluding an 8.4 percent jump in orders for transportation equipment, durable goods orders still rose by 1.2 percent in November compared to economist estimates for a 0.7 percent increase.

Amna Asaf, an economist at Capital Economics, said the better than expected jump in durable goods orders "suggests that fourth-quarter business investment in equipment may have picked up a bit."

A separate report from the Commerce Department showed a drop in new home sales in November, although sales still came in above economist estimates due to an upward revision to the October data.

The report said new home sales fell 2.1 percent to a seasonally adjusted annual rate of 464,000 in November from the revised October rate of 474,000. With the upward revision, the annual rate seen in October reflected the highest since July of 2008.

Economists had expected sales to climb to edge up to 450,000 from the 444,000 originally reported for the previous month.

Nonetheless, trading activity was somewhat subdued as many investors stayed on the sidelines ahead of the early close for the markets. The Christmas Day holiday on Wednesday also kept some traders away from their desks.

Following the holiday on Wednesday, trading activity is likely to remain relatively subdued when the markets reopen on Thursday, although the Labor Department's weekly jobless claims report may still attract some attention.