30.07.2024 21:16:36
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Treasuries See Further Upside Amid Rate Cut Optimism
(RTTNews) - After showing a lack of direction early in the session, treasuries moved to the upside over the course of the trading day on Tuesday.
Bond prices surged in early afternoon trading and managed to end the day moderately higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 3.5 basis points to 4.143 percent.
With the decrease on the day, the ten-year yield closed lower for the fourth consecutive session, dropping to its lowest closing level in over four months.
Treasuries continued to benefit from optimism about the outlook for interest rates ahead of the Federal Reserve's monetary policy announcement on Wednesday.
While the Fed is widely expected to leave interest rates unchanged, the accompanying statement could have a significant impact on the outlook for the central bank's next decision in September.
With Fed officials repeatedly saying they need "greater confidence" inflation is slowing before cutting rates, recent inflation data has led to optimism about a September rate cut.
According to CME Group's FedWatch Tool, there is currently an 87.7 percent chance the Fed will lower rates by a quarter point in September and an 11.9 percent chance of a half point rate cut.
Meanwhile, traders largely shrugged off a report released by the Conference Board showing consumer confidence in the U.S. unexpectedly improved from a downwardly revised level in the month of July.
The Conference Board said its consumer confidence index rose to 100.3 in July from a downwardly revised 97.8 in June.
Economists had expected the consumer confidence index to edge down to 99.5 from the 100.4 originally reported for the previous month.
While the Fed's monetary policy announcement is likely to be in the spotlight on Wednesday, traders are also likely to keep an eye on ADP's report on private sector employment.
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