2017.02.2815:19:00UTC+00Treasuries Close Modestly Higher But Off Best Levels

Following the pullback seen in the previous session, treasuries moved back to the upside during trading on Tuesday.

After seeing strength in morning trading, bond prices gave back ground in the afternoon but still closed higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.1 basis points to 2.358 percent.

The modestly higher close by treasuries came as traders looked ahead to President Donald Trump's highly anticipated speech to a joint session of Congress.

Traders will be looking for Trump to provide additional details on his policies on tax reform, deregulation, and infrastructure spending.

Traders were also reacting to a slew of U.S. economic data, including a report from the Commerce Department showing that the pace of economic growth in the fourth quarter was unrevised.

The report said gross domestic product increased by 1.9 percent in the fourth quarter, unrevised from the previous estimate. Economists had expected the pace of growth to be upwardly revised to 2.1 percent.

The unrevised GDP growth in the fourth quarter is notably slower than the 3.5 percent jump seen in the third quarter.

The Commerce Department said an upward revision to consumer spending was offset by downward revisions to state and local government spending and non-residential fixed investment.

A separate report from the Conference Board showed an unexpected improvement in consumer confidence in the month of February.

The Conference Board said its consumer confidence index climbed to 114.8 in February after falling to a revised 111.6 in January. Economists had expected the index to edge down to 110.9.

With the unexpected rebound, the consumer confidence index rose to its highest level since reaching 116.3 in July of 2001.

MNI Indicators also released a report showing a substantial acceleration in the pace of growth in Chicago-area business activity in the month of February.

Reaction to Trump's speech to Congress is likely to be a key driver for the markets early in the trading session on Wednesday.

Reports on personal income and spending, manufacturing activity, and construction spending are also likely to attract attention.

The Federal Reserve is also due to release its Beige Book, which could shed some additional light on the outlook for interest rates.