After trending higher over the past few sessions, treasuries gave back some ground during the trading day on Tuesday.
Bond prices moved to the downside early in the day and remained firmly negative throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4 basis points to 2.976 percent.
The pullback by treasuries came as traders looked ahead to the Federal Reserve's monetary policy announcement due Wednesday afternoon.
While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.
In U.S. economic news, the Institute for Supply Management released a report showing growth in manufacturing activity slowed by more than anticipated in the month of April.
The ISM said its purchasing managers index dropped to 57.3 in April from 59.3 in March, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 58.3.
A separate report released by the Commerce Department unexpectedly showed a steep drop on construction spending in the month of April.
The Commerce Department said construction spending slump by 1.7 percent to an annual rate of $1.285 trillion in March after jumping by 1.0 percent to a revised rate of $1.306 trillion in February.
Trading on Wednesday is likely to be impacted by reaction to the Fed decision, which may overshadow a report on private sector employment in the month of April.
by P2PNews Staff Writer