Bond Prices Trim Gains

U.S. Treasury prices pared gains and consolidated in slowed size late Tuesday as equities regained some ground with the long bond continuing to lead while the two-year remained the biggest loser hanging around unchanged. Earlier comments to Bloomberg from Senate Majority Leader Mitch McConnell dampened enthusiasm for plans for tax cuts and financial regulation rollbacks.

The 30-year yield recently traded near 2.995% versus a 2.9656% low, an early 3.0259% high and 3.005% close Monday. The 10-year yield is near 2.33%, having backed off 2.3064%, the lowest levels since May 3, from a 2.3618% high and 2.338% close. The five-year yield was near 1.85% from a 1.8285% low, 1.8816% high and 1.858% close. The two-year yield has been spun around 1.30%, holding near unchanged, from a 1.2783% low and 1.327% high.

The session’s early data showed that the April housing data missed expectations with Stifel chief economist, Lindsey M. Piegza, noting the drop in starts and permits “at the start of Q2 was particularly disappointing with more favorable weather expected to offset the lull in activity the month prior. Clearly, other factors, such as a still-moderate labor market and lackluster wage growth, are weighing on builders’ minds as they look out to next quarter’s market opportunities.”

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