Treasuries showed a lack of direction over the course of the trading session on Tuesday before ending the session roughly flat.
Bond prices moved modestly lower after seeing initial strength but bounced back near the unchanged line in afternoon trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.061 percent.
The choppy trading on the day came as traders seemed reluctant to make any significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.
The U.S. economy is experiencing its longest expansion in history, but the Fed is still expected to cut interest rates by at least 25 basis points in a proactive move aimed at offsetting the negative effects of the U.S.-China trade war.
President Donald Trump has repeatedly urged the Fed to lower rates, claiming in a post on Twitter on Monday that the central bank “has made all of the wrong moves.”
Assuming the Fed cuts rates as expected, traders are likely to pay close attention to the accompanying statement for clues about the potential for future rate cuts.
Traders largely shrugged off today’s batch of U.S. economic data, as nothing is expected to dissuade the Fed from cutting rates.
Early in the day, the Commerce Department released a report showing personal income and spending both rose in line with economist estimates in the month of June.
The National Association of Realtors and the Conference Board also released separate reports showing a bigger than expected jump in pending home sales and a substantial rebound in consumer confidence.
The Fed announcement is likely to remain in the spotlight on Wednesday, overshadowing reports on private sector employment and Chicago-area business activity.
The material has been provided by InstaForex Company – www.instaforex.com