NEW YORK (MarketWatch) — Treasury prices advanced Tuesday as investors digested home-price data while preparing for more housing numbers and a government debt auction.
The 10-year Treasury note 10_YEAR -1.33% yield, which falls as prices rise, was down 3 basis points at 2.592%. The benchmark yield, which is the basis for a wide range of borrowing costs around the world, has been trading in a narrow range in recent sessions as investors seek more clarity on the pace of U.S. economic growth, and how it will shape monetary policy.
The Federal Reserve last week reaffirmed its commitment to the low-rate policies that have been aimed at supporting the economy in recent years. Nonetheless, some fear the accelerating pace of growth may force the Fed to shift its guidance sooner than expected.
“I believe we are closing in on our goals, perhaps faster than some people might think,” said Charles Plosser, the president of the Philadelphia Fed, on Tuesday.
That has renewed investor focus on economic data for readings on growth. The S&P/Case-Shiller’s 20-city composite index on Tuesday showed 1.1% growth in April, though annual growth slowed down to a rate of 10.8% in April, the slowest in over a year.
Consumer confidence and new home sales data comes in at 10 a.m. Eastern.
Treasurys began climbing in morning trade amid disappointing German business confidence data and dovish comments from Bank of England Governor Mark Carney.
The 30-year bond 30_YEAR -1.19% yield fell 3 basis points to 3.415% while the 5-year note 5_YEAR -1.29% yield fell 2.5 basis points to 1.677%.
On Wednesday, a revision to first-quarter GDP is due, and personal consumption expenditure data is due out on Thursday. See the full calendar here.
The Treasury Department will also sell $107 billion worth of fixed- and floating-rate notes this week, beginning with $30 billion in 2-year notes 2_YEAR -0.21% on Tuesday.
Strategists at Nomura Securities expected substantial demand at the 2-year auction, suggesting that its yield was “near the upper end of the recent yield range.” However, they added that the note is “still rich in comparison with Fed’s forecasts in short term rate.”
