Treasuries Give Back Ground Following Recent Upward Trend

(RTTNews) - After trending higher over the past few sessions, treasuries showed a notable move back to the downside over the course of the trading day on Tuesday.

Bond prices moved steadily lower throughout much of the session before closing firmly in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 8.4 basis points to 2.691 percent.

With the notable increase on the day, the ten-year yield regained some ground after ending the previous session at its lowest closing level in a month.

The pullback by treasuries came as comments from Russian President Vladimir Putin eased concerns about the possibility of an escalation of the conflict in Ukraine, reducing the appeal of safe havens such as bond.

In remarks to reporters, Putin said there was "no need" for Russia to use military force in Ukraine, although he reserved the right to take action to protect ethnic Russians.

Putin claimed that Viktor Yanukovych remains Ukraine's "legitimate president" but said that military force would only be used in "an extreme case."

The Russian president also noted that military exercises near the Ukrainian border had ended as scheduled and claimed that the exercises were pre-planned and had nothing to do with the events in Ukraine.

Meanwhile, U.S. President Barack Obama remained critical of Russia's intervention in Crimea, describing it as a violation of Ukraine's territorial integrity and sovereignty.

"There is a strong belief that Russia's action is violating international law," Obama said. "I know President Putin seems to have a different set of lawyers making a different set of interpretations, but I don't think that's fooling anybody."

He added, "I think everybody recognizes that although Russia has legitimate interests in what happens in a neighboring state, that does not give it the right to use force as a means of exerting influence inside of that state."

Obama claimed that Putin is not abiding by the principle that a sovereign and independent people should be able to make their own decisions about their own lives.

While any further developments regarding Ukraine could impact trading on Wednesday, investors are likely to keep a close eye on reports on private sector employment and service sector activity.

The Federal Reserve is also due to release its Beige Book, a compilation of anecdotal evidence on economic conditions from each of the twelve Fed districts.