Treasuries Retreat From Early Highs but Hold Modest Gains as Housing Data Disappoints

Treasuries gave back early gains but remained positive on Tuesday, with the benchmark 10-year yield dipping 2.1 basis points to 5.115 percent after touching a low of 5.073 percent. Early strength followed weaker-than-expected housing data. The Commerce Department reported housing starts plunged 5.2 percent to an annual rate of 1.221 million in September, defying economist expectations for a 2.4 percent increase. Building permits dipped 0.2 percent to 1.400 million, while single-family permits fell 4.0 percent, offsetting a 6.1 percent surge in multi-family permits. The National Association of Realtors said pending home sales plummeted 7.3 percent to 66.0 in September, far exceeding forecasts for a 0.4 percent decline. Treasuries also drew support from a 2.5 percent drop in U.S. crude oil futures after reports that Qatari and Pakistani negotiators offered a compromise to end the U.S.-Iran war. Later reports, citing a diplomat, said claims a deal is close are wrong.