Treasuries Close Modestly Higher After Seeing Early Weakness

(RTTNews) - Treasuries turned higher over the course of the trading session on Tuesday after showing an early move to the downside.

Bond prices climbed into positive territory as the day progressed, ending the session modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 2.302 percent.

The ten-year yield continued to give back ground after reaching its highest closing level in well over a year last Friday.

The turnaround by treasuries was partly due to a sharp pullback by the price of crude oil, with crude for January delivery plunging $1.85 to $45.23 a barrel after jumping $1.02 to $47.07 a barrel on Monday.

The drop by the price of crude oil came amid concerns that OPEC members will be unable to finalize an agreement on cutting production at a meeting in Vienna on Wednesday.

Adding to the concerns, a report from Reuters said Iran and Iraq are resisting pressure from Saudi Arabia to curtail oil output.

The early weakness among treasuries came following the release of some upbeat economic data, including a report from the Commerce Department showing a bigger than expected upward revision to the pace of GDP growth in the third quarter.

The report said GDP climbed by 3.2 percent in the third quarter compared to the initially estimated 2.9 percent increase. Economists had expected the pace of growth to be upwardly revised to 3.0 percent.

The upwardly revised GDP growth in the third quarter compares to the 1.4 percent increase seen in the second quarter and marks the strongest growth in two years.

A separate report from the Conference Board showed a much bigger than expected improvement in consumer confidence in the month of November.

The Conference Board said its consumer confidence index surged up to 107.1 in October from an upwardly revised 100.8 in October. Economists had been expecting the index to climb to 101.0.

With the bigger than expected increase, the consumer confidence index reached its highest level since hitting 111.9 in July of 2007.

While trading on Wednesday may be impacted by any news out of the OPEC meeting, traders are also likely to keep an eye on reports on private sector employment, personal income and spending, and pending home sales.

The Federal Reserve is also scheduled to release its Beige Book, which could shed some additional light on the outlook for interest rates.