MW: Treasurys turn down after confidence, housing data
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices moved down modestly on Tuesday, pushing yields up once again, following a positive pair of reports on consumer confidence and home prices.
Yields on 10-year notes (UST10Y 3.88, +0.02, +0.49%) rose 2 basis points to 3.89%, after having been lower in earlier trading. Yields move inversely to prices and a basis point is 0.01%.
Yields on 2-year notes (UST2YR 1.05, +0.02, +1.55%) rose 1 basis points to 1.06%.
Treasurys stayed down after a report showed consumer confidence rose to 52.5 in March from 46.4 last month. Economists surveyed by MarketWatch expected the gauge to rise to 51. Read about consumer confidence.
"Overall, a solid rebound in confidence but within the confines of the recent range," said strategists at CRT Capital Group.
After being slightly higher during the European trading session, Treasury prices gave up gains as the Case-Shiller home-price index showed home prices rose a seasonally-adjusted 0.3% in January. See more on home prices.
"Although the broader economy continues to show signs of being on a recovery path, the latest housing stats remain weak or continue to weaken," said George Goncalves, strategist at Nomura Securities.
Analysts noted small moves in Treasurys over the last couple sessions after yields touched the highest since last year and struggled to break above key levels. They cited several big events for the market to digest: month-end buying and information about the government's debt sales next week as well as the data on U.S. nonfarm payrolls, due out on Friday.
"The market still holds its breath over tomorrow's ADP report, tomorrow's month-end extension, Friday's nonfarm payroll report and then next week's auctions," said strategists at RBS Securities." With the risk of potholes everywhere up ahead, why speed down the road?"
Benchmark bond indexes, at the end of every month, add any debt that was sold during the period, which usually extended the duration of the index.
Duration is a measure of price sensitivity to a change in interest rates, and is partly determined by maturity. Fund managers who try to match their holdings to benchmark indexes therefore buy recently-issued debt at month end.
