Treasuries Close Lower Following Upbeat Consumer Confidence Data

(RTTNews) - After ending the previous session modestly higher, treasuries moved back to the downside during trading on Tuesday.

Bond prices moved lower in early trading and remained stuck in the red throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 1.563 percent.

The pullback by treasuries came following the release of a report showing a continued improvement in consumer confidence in the month of December.

The Conference Board said its consumer confidence index jumped to 113.7 in December from an upwardly revised 109.4 in November.

Economists had expected the consumer confidence index to rise to 108.5 from the 107.1 originally reported for the previous month.

"Consumer Confidence improved further in December, due solely to increasing Expectations which hit a 13-year high," said Lynn Franco, Director of Economic Indicators at The Conference Board.

She added, "Looking ahead to 2017, consumers' continued optimism will depend on whether or not their expectations are realized."

Treasuries remained stuck in the red following the releases of the results of the Treasury Department's auction of $26 billion worth of two-year notes, which attracted below average demand.

The two-year note auction drew a high yield of 1.280 percent and a bid-to-cover ratio of 2.44, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.71.

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

Looking ahead, the Treasury is due to sell $34 billion worth of five-year notes on Wednesday, and $28 billion worth of seven-year notes on Thursday.

Wednesday morning, the National Association of Realtors is scheduled to release a report on pending home sales in the month of November. Pending home sales are expected to climb by 0.5 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.