Ten-Year Yield Surges To Three-Month Closing High

(RTTNews) - Treasuries showed a substantial move to the downside during trading on Tuesday, more than offsetting the modest rebound seen last Friday.

Bond prices regained some ground after seeing early weakness but moved back to the downside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 12.7 basis points to 3.955 percent.

The ten-year yield extended the downward trend seen throughout February, reaching its highest closing level in well three months.

Concerns about the outlook for interest rates continued to weigh on treasuries, with recent economic data leading to worries the Federal Reserve may raise rates higher than currently anticipated and keep rates at an elevated level for an extended period.

On Wednesday, the Fed is scheduled to release the minutes of its latest monetary policy meeting, which could shed additional light on the outlook for interest rates.

Traders largely shrugged off a report from the National Association of Realtors showing existing home sales in the U.S. unexpectedly decreased for the twelfth consecutive month in January.

NAR said existing home sales slid 0.7 percent to an annual rate of 4.00 million in January after tumbling by 2.2 percent to a revised rate of 4.12 million in December.

The continued decline surprised economists, who had expected existing home sales to inch up by 0.1 percent compared to the 1.5 percent slump originally reported for the previous month.

Trading activity on Wednesday may be somewhat subdued ahead of the release of the Fed minutes relatively late in the session.