Treasuries Close Nearly Unchanged Following Med Minutes

After turning higher over the course of the previous sessions, treasuries showed a lack of direction during trading on Tuesday.

Bond prices spent the day bouncing back and forth across the unchanged line before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slipped less than a basis point to 4.418 percent.

Despite the choppy trading on the day, the ten-year yield still edged down to its lowest closing level in two months.

The lackluster performance on the day came as traders seemed reluctant to make significant moves ahead of the release of the minutes of the latest Federal Reserve meeting.

However, treasuries continue to lack direction even after the release of the minutes, which said Fed officials expect to keep interest rates at a restrictive level for “some time.”

The minutes of the October 31-November 1 meeting said participants agreed policy should remain restrictive until inflation is clearly moving down sustainably toward the Fed’s 2 percent objective.

Following the recent series of interest rate hikes, participants also agreed to proceed carefully and take a data-dependent approach to future policy decisions.

“Participants noted that further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the Committee’s inflation objective was insufficient,” the Fed said.

The Fed also said participants expect data arriving in coming months to help clarify the extent to which the disinflation process was continuing.

On the U.S. economic front, the National Association of Realtors released a report showing existing home sales in the U.S. tumbled by much more than expected in the month of October

NAR said existing home sales plummeted by 4.1 percent to an annual rate of 3.79 million in October after plunging by 2.2 percent to a revised rate of 3.95 million in September.

Economists had expected existing home sales to slump by 1.5 percent to a rate of 3.90 million from the 3.96 million originally reported for the previous month.

With the much steeper than expected drop, existing home sales fell to their lowest level since August 2010.

Trading on Wednesday may be impacted by reaction to the latest U.S. economic news, including reports on durable goods orders and weekly jobless claims.

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