Treasuries Show Notable Move Back To The Upside

(RTTNews) - After the pullback seen last Friday, treasuries moved back to the upside on Tuesday as trading resumed following the long weekend.

Bond prices moved higher in early trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.3 basis points to 2.327 percent.

With the notably decrease on the day, the ten-year yield ended the session at its lowest closing level in well over a month.

The higher close by treasuries came following the release of a report from the New York Federal Reserve showing that growth in New York manufacturing activity has seen a modest slowdown in the month of January.

The New York Fed said its general business conditions index edged down to 6.5 in January from a revised 7.6 in December, although a reading above 50 still indicates growth.

Economists had expected the general business conditions index to dip to 8.0 from the 9.0 originally reported for the previous month.

Traders were also reacting to British Prime Minister Theresa May's "Brexit" speech in which she said the U.K. will not seek to "hold on to bits of EU membership."

The U.K. also will not seek to adopt deals that are already available to other countries, May said in a speech at the Lancaster House. Britain "cannot be half in and half out," she said.

May also said Britain will not seek to remain in the single market, as it would mean not leaving the EU at all. However, she said the country will try to gain the "greatest possible" access to the EU.

Trading on Wednesday may be impacted by reaction to reports on consumer prices, industrial production, and homebuilder confidence.

The Federal Reserve is also due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, which may shed some light on the outlook for interest rates.