After moving steadily lower for much of the session, treasuries regained some ground going into the close of trading on Tuesday but still ended the day in the red. Bond prices climbed off their worst levels late in the session but closed in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.9 basis points to 2.72 percent. The weakness among treasuries came as demand for the Treasury Department's weekly bill auctions came in at the lowest levels since 2009. Traders also kept a close eye on developments in Washington amid reports of conflicting Senate and House proposals to reopen the government and raise the debt ceiling. Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., both made some optimistic comments regarding the Senate negotiations and indicated that an agreement could be reached as soon as today. However, Reid quickly lashed out at a separate plan reportedly being offered by House Republicans, claiming that it would be dead on arrival in the Senate. The House proposal would reportedly fund the government and raise the debt limit for similar lengths of time as the Senate's proposal, but it would also make changes to Obamacare and prevent the Treasury from using extraordinary measures to avert default. Reid described the legislation reportedly being considered by House Republicans as a blatant attack on bipartisanship. Meanwhile, House Speaker John Boehner, R-Ohio, claimed that there have been no decisions about what exactly the House will do. Subsequent reports have suggested that the negotiations in the Senate have been put on hold while the House decides how to proceed. On the economic front, the New York Federal Reserve released a report showing that business conditions for New York manufacturers were little changed in the month of October. The report showed that the New York Fed's general business conditions index fell to 1.5 in October from 6.3 in September. While a positive reading indicates an increase in regional manufacturing activity, economists had expected the index to climb to 7.0. Developments in Washington are likely to remain in focus on Wednesday as the deadline to raise the debt ceiling draws ever closer. The ongoing fiscal crisis is likely to overshadow the release of a report on homebuilder confidence as well as the Federal Reserve's Beige Book.
Posted on: Tue, 15 Oct 2013 19:39:02 +0000
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