Treasuries Show Modest Rebound Following Recent Pullback

Trading 02 avr 2019 Donner votre avis

After moving notably lower over the past few sessions, treasuries regained some ground during the trading day on Tuesday.

Bond prices moved to the upside early in the session and remained modestly higher throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.6 basis points to 2.481 percent.

The modest rebound by treasuries came as traders picked up bonds at somewhat reduced levels following the pullback seen in recent sessions.

Treasuries remained positive following the release of a Commerce Department showing a steep drop in durable goods orders in the month of February, with the decrease largely due to a nosedive in orders for transportation equipment.

The Commerce Department said durable goods orders tumbled by 1.6 percent in February after inching up by a downwardly revised 0.1 percent in January.

Economists had expected durable goods orders to plunge by 1.8 percent compared to the 0.3 percent increase that had been reported for the previous month.

Excluding the substantial decrease in orders for transportation equipment, however, durable goods orders actually inched up by 0.1 percent in February after edging down by 0.1 percent in January.

The Commerce Department also said orders for non-defense capital goods excluding aircraft, a closely watched indicator of business spending, edged down by 0.1 percent in February after climbing by 0.9 percent in January.

Paul Ashworth, Chief U.S. Economist at Capital Economics, noted shipments in the same category were unchanged, albeit after a 1.0 percent jump in January.

"Nevertheless, non-defense capital goods (ex-aircraft) shipments are on track to expand by a modest 4% annualized in the first quarter, which points to an equally modest gain in business equipment investment," Ashworth said.

He added, "The moderation in the survey evidence over the past few months, which reflects the global manufacturing downturn, indicates that underlying durable goods orders and shipments will continue to grow at a very modest pace over the next few months."

Trading on Wednesday may be impacted by reaction to reports on private sector employment and service sector activity, although trading activity may remain subdued ahead of Friday's more closely watched monthly jobs report.


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