Treasuries Give Back Ground As Data Not As Bad As Feared

After moving higher over the three previous sessions, treasuries gave back some ground during the trading day on Tuesday.

Bond prices climbed off their worst levels after an early move to the downside but remained in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points to 0.698 percent.

The pullback by treasuries came as separate reports on consumer confidence and Chicago-area business activity showed deteriorations in March but still came in well above economist estimates.

A report from the Conference Board showed its consumer confidence index slumped to 120.0 in March from an upwardly revised 132.6 in February.

However, economists had expected the consumer confidence index to tumble to 110.0 from the 130.7 originally reported for the previous month.

MNI Indicators released a separate report showing its Chicago business barometer fell to 47.8 in March from 49.0 in February, with a reading below 50 indicating a contraction in regional business activity.

The Chicago business barometer remained below 50 for the ninth straight month but showed a relatively modest decrease compared to economist estimates for a slump to 40.0.

The better than expected data has offset some of the concerns about the economic impact of the ongoing coronavirus pandemic.

A report showing an unexpected expansion in Chinese manufacturing activity in the month of March has also helped to alleviate the worries.

The latest survey from the National Bureau of Statistics showed China’s purchasing managers index jumped to 52.0 in March from 35.7 in February, with a reading above 50 indicting an expansion.

Economists had expected the index to climb to 45.0, although a reading below 50 would have indicated a continued contraction in Chinese manufacturing activity.

Reports on private sector employment and manufacturing activity may attract attention on Wednesday, as traders attempt to gauge the early economic impact of the coronavirus pandemic.

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