WASHINGTON (dpa-AFX) - Following the pullback seen over the two previous sessions, treasuries saw further downside during the first trading day of the new year on Tuesday.
Bond prices regained some ground after an initial slump but remained firmly in negative territory. As a result the yield on the benchmark ten-year note, which moves opposite of its price, jumped 8.0 basis points to 3.946 percent.
The ten-year yield closed higher for the third consecutive session, climbing well off the five-month closing low set last Wednesday.
The continued weakness among treasuries may have reflected concerns recent strength in the bond market was overdone even as the Federal Reserve is still widely expected to begin cutting interest rates in the coming months.
CME Group's FedWatch Tool is currently indicating a 71.9 percent chance the Fed will cut rates by a quarter point in March.
In U.S. economic news, a report released by the Commerce Department showed construction spending rose by slightly less than expected in November, although the report also showed a significant upward revision to the increase in spending in October.
The Commerce Department said construction spending climbed by 0.4 percent to an annual rate of $2.050 trillion in November after surging by 1.2 percent to an upwardly revised rate of $2.043 trillion in October.
Economists had expected construction spending to rise by 0.5 percent compared to the 0.6 percent increase originally reported for the previous month.
Early trading on Wednesday may be impacted by reaction to separate U.S. reports on manufacturing activity and job openings.
Later in the day, trading may be driven by reaction to the minutes of the Federal Reserve's latest monetary policy meeting, which could impact the outlook for interest rates.
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