NEW YORK (MarketWatch) — Treasury prices fell Tuesday after a round of mixed economic data, putting the market on track for yearly losses, as the benchmark note yield climbed over a full percentage point in 2013.
The Barclays U.S. Aggregate index, which follows the broader bond market, is down 1.92% on the year, it's first losses since 1999 and worst losses since 1994. The Barclays U.S. Treasury Index is set for annual losses of 2.63%, its worst performance since 2009.
Treasury yields began rising sharply in May as the Federal Reserve signaled that it may ease up on its bond-buying stimulus program. The wind-down of that program was announced earlier in December, pushing the 10-year Treasury note (10_YEAR) yield to close above 3% for the first time since 2011.
/quotes/zigman/4868283/delayed 10_YEAR 3.01, +0.03, +1.04% 10-year Treasury yield in 2013
The benchmark 10-year note yield, which rises as prices fall, was up 2 basis points on the day at 2.993%, as it continued to crisscross the 3% threshold that is emblematic of a rising-rate environment.
"10-year Treasury yields at 3% leaves us on the cusp of a renewed push to new highs in yield, the next level being the 3.20% high from July 1st 2011, ahead of a more serious break to the 3.60/70% high area from Feb-April 2011," said Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities, in a note.
The benchmark note is on track to close out the year roughly 123 basis points higher than where it began, the quarter 38 basis points higher, and the month 25 basis points higher, according to FactSet.
The 30-year bond (30_YEAR) yield rose half a basis point on the day to 3.911%. The 5-year note (5_YEAR) yield rose a basis point to 1.724%.
Data released on Tuesday were mixed. The Conference Board said that consumer confidence regained its momentum as its index jumped to 78.1% in December from 72.0% in November.
A survey on business conditions in the Chicago area fell in December, but remained strong. The Chicago Business Barometer slipped to 59.1% from 63.0% in the previous month.
The Case-Shiller home-prices index rose 0.2% in October and 13.6% in the past 12 months, the largest yearly gain since February 2006. Nonetheless, the report was cautious about the pace of price increases in 2014.
Improving data in recent months prompted the Federal Reserve to announce that it would begin tapering its $85 billion in monthly bond-buying stimulus. The central bank said it would keep its key policy rate low until the unemployment rate fell well below 6.5%.
"Investors have already 'priced in' both the Fed's taper announcement and the economy's improved economic growth. This has helped temper the recent rise in interest rates," said William Riegel and Lisa Black, of TIAA-CREF, in a Monday note.
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