Treasuries Close Firmly In The Red Following GDP Data

(RTTNews) - After ending the previous session roughly flat, treasuries came under pressure over the course of the trading session on Tuesday.

Bond prices moved moderately lower in early trading and saw further downside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.2 basis points to 2.239 percent.

The weakness among treasuries came as the Commerce Department downwardly revised its estimate of third quarter GDP growth but the data did not change the near-term outlook.

The report said real gross domestic product increased by 2.0 percent in the third quarter compared to the previously estimated 2.1 percent growth. The downward revision matched economist estimates.

The Commerce Department said the slightly slower than previously estimated GDP growth primarily reflected a downward revision to private inventory investment.

Gus Faucher, senior economist at PNC Financial, said the downward revision to inventory investment provides modest upside potential for growth in late 2015 and early 2016, adding, "The economy should continue to expand at an above-trend pace through next year."

Meanwhile, the National Association of Realtors released a separate report showing that existing home sales tumbled to their lowest level in well over a year in November.

NAR said existing home sales plunged 10.5 percent to an annual rate of 4.76 million in November from a downwardly revised 5.32 million in October.

Economist had expected existing home sales to edge down to a rate of 5.32 million from the 5.36 million originally reported for the previous month.

With the bigger than expected decrease, existing home sales fell to their lowest rate since hitting 4.75 million in April of 2014.

Treasuries were also negatively impacted by continued strength on Wall Street, as stocks further offset the sharp pullback seen late last week.

Trading on Wednesday may be impacted by the release of a slew of U.S. economic data, including reports on durable goods orders, personal income and spending, new home sales, and consumer sentiment.