Treasuries Move Higher Ahead Of Powell Testimony

(RTTNews) - After showing a lack of direction early in the session, treasuries moved to the upside over the course of the trading day on Tuesday.

Bond prices climbed firmly into positive territory after initially bouncing back and forth across the unchanged line. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.0 basis points to 3.729 percent.

The strength that emerged among treasuries came as traders looked ahead to congressional testimony by Federal Reserve Chair Jerome Powell.

Powell is due to testify before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.

Traders are likely to pay close attention to Powell's remarks, looking for additional clues about the outlook for rates after the Fed signaled further rate hikes last week.

Comments by a number of other Fed officials are also likely to attract attention in the coming days along with reports on weekly jobless claims and existing home sales.

On the U.S. economic front, a report released by the Commerce Department showed new residential construction in the U.S. unexpectedly skyrocketed in the month of May.

The Commerce Department said housing starts soared by 21.7 percent to an annual rate of 1.631 million in May after tumbling by 2.9 percent to a revised rate of 1.340 million in April.

Economists had expected housing starts to edge down to a rate of 1.400 million from the 1.401 million originally reported for the previous month.

The report said building permits also surged by 5.2 percent to an annual rate of 1.491 million in May after slumping by 1.4 percent to a revised rate of 1.417 million in April.

Building permits, an indicator of future housing demand, were expected to rise to a rate of 1.423 million from the 1.416 million originally reported for the previous month.

Powell's congressional testimony is likely to be in the spotlight on Wednesday, while remarks by several other Fed officials may also attract attention.