After moving sharply lower over the course of the previous session, treasuries regained some ground during trading on Tuesday.
Bond prices moved to the upside early in the session and remained firmly positive throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.3 basis points to 0.711 percent.
The rebound by treasuries was partly due to bargain hunting after the ten-year yield ended Monday’s trading at its highest closing level in a month.
Traders were also reacting to comments from Federal Reserve Chair Jerome Powell, who reaffirmed the central bank will provide more support to the economy.
Testifying before the Senate Banking Committee today, Powell said the central bank needs to be prepared to “act further and I would say we are, if the need is there.”
“As a society, we should do everything we can to provide relief to those who are suffering for the public good,” Powell said.
On the U.S. economic front, the Commerce Department released a report showing another steep drop in new residential construction in the U.S. in the month of April.
The report said housing starts plummeted by 30.2 percent to an annual rate of 891,000 in April after tumbling by 18.6 percent to a revised 1.276 million in March.
Economists had expected housing stocks to plunge by 23.8 percent to a rate of 927,000 from the 1.216 million originally reported for the previous month.
The Commerce Department said building permits also slumped by 20.8 percent to an annual rate of 1.074 million in April after falling by 5.7 percent to a revised 1.356 million in March.
Building permits, an indicator of future housing demand, had been expected to nosedive by 26.1 percent to a rate of 1 million from the 1.353 million originally reported for the previous month.
Trading on Wednesday may be impacted by reaction to the minutes of the Federal Reserve’s latest monetary policy meeting.
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