Treasuries Move To Upside Ahead Of Key Inflation Data

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After ending the previous session nearly unchanged, treasuries moved to the upside over the course of the trading day on Monday.

Bond prices moved higher in morning trading and remained firmly positive throughout the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.4 basis points to 1.608 percent.

The advance by treasuries came amid a quiet day on the U.S. economic front, with traders keeping an eye on remarks by several Federal Reserve officials.

The economic calendar picks in the coming days and traders are likely to pay close attention to reports on new home sales, consumer confidence, durable goods orders, and personal income and spending.

The personal income and spending report includes a reading on inflation said to be preferred by the Federal Reserve, which could have an impact on the outlook for monetary policy.

While the Fed has repeatedly signaled it believes the recent increase in inflation largely reflects “transitory factors,” a spike in prices could still raise concerns about the central bank tapering its asset purchases.

Trading on Tuesday may be impacted by reaction to reports on home prices, new home sales and consumer confidence.

Bond traders are also likely to keep an eye on the results of the Treasury Department’s auction of $60 billion worth of two-year notes.

The material has been provided by InstaForex Company – www.instaforex.com

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