Treasury notes rose on Tuesday as traders made the move from riskier assets into bonds, following the path of least resistance on the day by moving note values higher and yields lower. The markets ignored the question of why 0.9% was enough interest to earn to hold notes, especially if equities were unable to move higher.
The Federal Reserve sold a record number of new-issue notes last week, and created another mass of dollar backed Treasuries for the market to absorb. On Tuesday the Fed continued it short-dollar mandate by buying $7.3b of U.S. debt, in its ninth buy-back operation since March 25th. The 10 year Treasury yield dropped to the lowest level in a week to trade at to 2.78%, down 8 basis points on the day, something that allowed the dollar spinning around trying to match par values.
Crude oil for April delivery was pushing into major support at $51.50, down over 2% on the day, with a $1.03 loss. Futures had climbed as much as 2.1% before the release of the U.S. retail sales numbers that disappointed the markets. Futures are however up over 10% so far this year.
Gold for April delivery was recently trading down $4.40 (-0.5%) at $891 per ounce. Bullion held in the SPDR Gold ETF remained unchanged at a record 1,127.68 metric tons, for a second day.