Treasuries Show Significant Downturn After Seeing Initial Strength

After seeing initial strength, treasuries showed a significant downturn over the course of the trading session on Tuesday.

Bond prices pulled back well off their early highs and into negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.9 basis points to 1.771 percent after hitting a low of 1.689 percent.

Treasuries initially benefited from the renewed uncertainty about the U.S.-China trade deal that surfaced while the bond markets were closed on Monday.

However, the safe-haven appeal of treasuries faded as stocks on Wall Street rallied in reaction to upbeat earnings news from several big-name companies.

JPMorgan (JPM), UnitedHealth (UNH), Citigroup (C) and Johnson & Johnson (JNJ) all reported better than expected results to get earnings season off to a strong start.

In economic news, the Federal Reserve Bank of New York released a report unexpectedly showing a modest acceleration in the pace of growth in regional manufacturing activity in the month of October.

The New York Fed said its headline general business conditions index edged up to 4.0 in October after dipping to 2.0 in September, with a positive reading indicating an increase in regional manufacturing activity.

The modest uptick came as a surprise to economists, who had expected the general business conditions index to slip to 0.8.

Looking ahead, trading on Wednesday may be impacted by reaction to reports on retail sales and homebuilder confidence as well as the Federal Reserve’s Beige Book.

The material has been provided by InstaForex Company – www.instaforex.com