U.S. Government Bonds Move Lower -- Update

By Daniel Kruger Features Dow Jones Newswires

U.S. government bond prices slipped Tuesday amid fresh economic data, a poorly received bond auction and concerns about progress on the budget.

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The yield on the benchmark 10-year U.S. Treasury note yield rose for the second time in three days, climbing to 2.338% from 2.328% Monday. Bond yields rise as prices fall.

A combination of factors played into the day's swings. Yields slipped early in the session after Democratic congressional leaders pulled out of planned budget talks with President Donald Trump after the president said in a tweet he didn't see a path to a government spending deal, raising concerns about a possible legislative stalemate. They rose later after the Treasury's $28 billion offering of seven-year notes met with weaker-than-expected demand from investors.

Fresh data on housing prices and consumer confidence also contributed to Tuesday's moves. Those included an acceleration in home prices, as the S&P CoreLogic Case-Shiller National Home Price Index, which covers the entire nation, rose at the fastest annual rate since June 2014 in September.

Consumer confidence also rose, hitting a fresh 17-year high, according to the Conference Board, while the U.S. trade deficit in goods climbed in October as exports fell, according to the Commerce Department.

Later in the week, the Commerce Department will release its latest report on the price index for personal-consumption expenditures, the Fed's preferred inflation gauge, while the Senate nears a vote on major tax cut legislation.

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Jerome Powell, President Trump's nominee to succeed Janet Yellen as chairman of the Federal Reserve, also signaled in Senate testimony Tuesday the central bank is likely to raise interest rates in December.

"There are some issues that the government needs to resolve," said John Bredemus, head of capital markets for Allianz Investment Management. The unsettled nature of tax and budget talks in Congress, as well as hearings for a new Fed chairman, "adds some volatility," he said.

Write to Daniel Kruger at daniel.kruger@wsj.com

(END) Dow Jones Newswires

November 28, 2017 17:12 ET (22:12 GMT)