Treasuries Move To The Downside After Seeing Early Strength

After failing to sustain an early move to the upside, treasuries came under pressure over the course of the trading session on Wednesday.

Bond prices pulled back well off their early highs and into negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.7 basis points to 3.887 percent after hitting a low of 3.815 percent.

The ten-year yield extended the upward trend seen over the past several sessions, reaching its highest closing level in well over a month.

The downturn by treasuries may have reflected ongoing concerns about how far the Federal Reserve plans to raise interest rates in the coming months.

The Fed’s next monetary policy meeting is a month away, but traders may get some insight into the outlook for rates with the release of the minutes of the central bank’s December meeting next Wednesday.

Overall trading activity was still relatively subdued, however, as many traders remain away from their desks amid the holidays.

Following the long Christmas weekend, the markets are set for another break this weekend due to New Year’s Day.

Traders may also be looking ahead to next week’s closely watched monthly jobs report, which could shed additional light on the outlook for interest rates and the economy.

On the economic front, a report released by the National Association of Realtors unexpectedly showed a continued slump in U.S. pending home sales in the month of November.

NAR said its pending home sales index tumbled by 4.0 percent to 73.9 in November after plunging by 4.7 percent to a revised 77.0 in October.

The extended nosedive came as a surprise to economists, who had expected pending home sales to increase by 0.6 percent.

Trading activity is likely to remain light on Thursday, although a report on weekly jobless claims may attract some attention.

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