Treasuries Move Back To The Downside On Housing Data

(RTTNews) - Following the upward move seen in the previous session, treasuries moved back to the downside during trading on Tuesday.

After coming under pressure in early trading, bond prices regained some ground before pulling back going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.6 basis points to 2.196 percent.

The pullback by treasuries came following the release of a report from the Commerce Department showing that housing starts edged up to a nearly eight-year high in July.

The report said housing starts inched up by 0.2 percent to an annual rate of 1.206 million in July from the revised June estimate of 1.204 million.

With the modest increase, housing starts rose to their highest annual rate since reaching 1.264 million in October of 2007.

Meanwhile, the report also said building permits, an indicator of future housing demand, plunged 16.3 percent to an annual rate of 1.119 million in July after jumping to an eight-year high of 1.337 million in June.

Traders were also expressing some trepidation ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting on Wednesday.

The minutes are likely to be closely analyzed for hints regarding whether the Fed will begin raising interest rates at its next meeting in September.

Along with the Fed minutes, trading on Wednesday could also be impacted by reaction to the release of a report on consumer price inflation.

Economists expect both the headline consumer price index and the core consumer price index, which excludes food and energy prices, to rise by 0.2 percent in July.