Treasuries Extend Recent Downtrend Ahead Of Fed Announcement

(RTTNews) - Treasuries moved moderately lower during trading on Tuesday, extending the downward trend seen in recent sessions.

Bond prices moved steadily to the downside in morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.9 basis points to 1.931 percent.

With the increase on the day, the ten-year yield moved higher for the seventh straight session, reaching its highest closing level in a month.

The continued weakness among treasuries came as traders looked ahead to the Federal Reserve's monetary policy announcement on Wednesday.

While the Fed is widely expected to leave interest rates unchanged, traders are likely to keep a close eye on the accompanying statement for clues about the outlook for the next meeting in June.

Treasuries remained in the red after the Treasury Department released the results of its auction of $34 billion worth of five-year notes.

The five-year note auction drew a high yield of 1.410 percent and a bid-to-cover ratio of 2.41, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.44.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

On the U.S. economic front, the Conference Board released a report showing a bigger than expected drop in consumer confidence in April.

The Conference Board said its consumer confidence index dropped to 94.2 in April from a revised 96.1 in March. Economists had expected the index to edge down to 96.0 from the 96.2 originally reported for the previous month.

A separate report from the Commerce Department showed that durable goods orders rose by less than expected in March.

The Commerce Department said durable goods orders climbed by 0.8 percent in March after tumbling by a revised 3.1 percent in February.

Economists had expected durable goods orders to increase by 1.6 percent compared to the 2.8 percent drop originally reported for the previous month.

Excluding a jump in orders for transportation equipment, durable goods orders dipped by 0.2 percent in March after slumping by 1.3 percent in February.

The decrease in ex-transportation orders came as a surprise to economists, who had expected a 0.5 percent increase.

Standard & Poor's also released a report showing that the annual rate of home price growth in major metropolitan areas slowed by more than expected in February.

The Fed announcement will be in the spotlight during trading on Wednesday, likely overshadowing a report on pending home sales.