Treasuries Close Modestly Higher After Seeing Early Weakness

(RTTNews) - After seeing early weakness, treasuries turned higher over the course of the trading session on Tuesday amid the release of a slew of U.S. economic data.

Bond prices climbed well off their early lows to end the day modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.7 basis points to 1.834 percent.

The rebound by treasuries came following the release of some disappointing economic data, including a report from the Conference Board showing an unexpected drop in consumer confidence in the month of May.

The Conference Board said its consumer confidence index dropped to 92.6 in May from 94.7 in April. The index had been expected to climb to 97.0.

"Consumer confidence declined slightly in May, primarily due to consumers rating current conditions less favorably than in April," said Lynn Franco, Director of Economic Indicators at The Conference Board.

"Expectations declined further, as consumers remain cautious about the outlook for business and labor market conditions," she added. "Thus, they continue to expect little change in economic activity in the months ahead."

MNI Indicators also released a report showing an unexpected contraction in Chicago-area business activity in May.

The Chicago business barometer dropped to 49.3 in May from 50.4 in April, with a reading below 50 indicating a contraction. The decrease came as a surprise to economists, who had expected the index to inch up to 50.7.

Meanwhile, the Commerce Department released a report earlier in the day showing a bigger than expected jump in personal spending in April.

The Commerce Department said personal spending surged up by 1.0 percent in April after coming in unchanged in March. Economists had expected spending to climb by 0.7 percent.

The report also said personal income rose by 0.4 percent in April, matching the increase seen in the previous month as well as economist estimates.

Trading on Wednesday may be impacted by reaction to reports on manufacturing activity and construction spending as well as the Federal Reserve's Beige Book.