Treasuries came under pressure over the course of the trading day on Tuesday, extending the downward move seen over the past several sessions.
Bond prices slid into negative territory in early trading and remained stuck in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.1 basis points to 2.176 percent.
The increase represented the seventh consecutive gain by the ten-year yield, which reached its highest closing level in almost two months.
The continued weakness among treasuries was partly due to ongoing concerns about the outlook for interest rates following the release of upbeat service sector data.
The Institute for Supply Management released a report this morning showing an unexpected acceleration in the pace of service sector growth in April.
The ISM said its non-manufacturing index rose to 57.8 in April from 56.5 in March, with a reading above 50 indicating growth in the service sector. Economists had expected the index to edge down to 56.2.
With the unexpected increase, the non-manufacturing index reached its highest level since hitting 58.8 in November of last year.
The service sector data overshadowed a separate report from the Commerce Department showing that the U.S. trade deficit widened substantially in the month of March.
The report said the trade deficit soared to $51.4 billion in March from a revised $35.9 billion in February. Economists had expected a significantly smaller deficit of about $42.0 billion.
The much wider than expected deficit in March reflected the largest U.S. trade deficit since the $60.2 billion gap seen in October of 2008.
Another batch of economic data may attract attention on Wednesday, with traders likely to keep an eye on reports on private sector employment and labor productivity and costs.
Trading could also be impacted by reaction to remarks by Federal Reserve Chair Janet Yellen and International Monetary Fund Managing Director Christine Lagarde.
The material has been provided by InstaForex Company – www.instaforex.com