Treasuries Finish Volatile Session Modestly Higher

Treasuries showed a lack of direction over the course of the trading session on Tuesday after once again failing to sustain an early move to the upside.

Bond prices bounced back and forth across the unchanged line before eventually closing modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.7 basis points to 3.998 percent.

The ten-year yield gave back ground after inching up to an over fourteen-year closing high in the previous session.

Treasuries initially benefited from bargain hunting following recent weakness, but the buying interest once again proved to be short-lived amid lingering concerns about the outlook for interest rates.

The volatility seen over the remainder of the session came as traders reacted to a mixed batch of U.S. economic data.

The Federal Reserve released a report showing industrial production increased by more than expected in the month of September.

The Fed said industrial production rose by 0.4 percent in September after edging down by a revised 0.1 percent in August.

Economists had expected industrial production to inch up by 0.1 percent compared to the 0.2 percent dip originally reported for the previous month.

Meanwhile, a separate report from the National Association of Home Builders showed a continued deterioration in U.S. homebuilder confidence in the month of October.

The report showed the NAHB/Wells Fargo Housing Market Index slumped to 38 in October from 46 in September. Economist had expected the index to dip to 43.

The housing market index declined for the tenth consecutive month, falling to its lowest reading since August 2012, with the exception of the onset of the pandemic in the spring of 2020.

A report on new residential construction may attract some attention on Wednesday, while traders are also likely to keep an eye on the Fed’s Beige Book.

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