By Sunny Oh

The benchmark 10-year Treasury note price rose on Tuesday, pulling down the yield, ahead of a key home sales number that could give investors a snapshot of inflationary pressures from the housing market.

What are yields doing?

The 10-year Treasury yield fell 1.6 basis point to 2.354%. The 2-year yield was slightly up at 1.763%, versus 1.754% late Monday, while the 30-year bond yield was down 3 basis points to 2.758%.

Bond prices move in the opposite direction of yields.

What's driving markets?

Investors will eye existing home sales data out on 10 a.m. Eastern, which could set the tone for the rest of the trading session. Housing and rental prices are an important component of inflation measures. A strong number could raise the outlook for stronger inflationary pressures running into next year.

The European Central Bank will make small touches to the language of the policy statement instead of significant revisions when it ends its bond-buying program next year, reported Bloomberg (https://www.bloomberg.com/news/articles/2017-11-20/ecb-is-said-likely-to-take-small-steps-in-guidance-on-qe-exit-ja8jwyf5). Also, the minutes from the ECB's October meeting is set for release on Thursday and give investors' clarity on its decision to taper its asset purchases beginning from next year.

What did market participants say?

"Housing is not as glaringly affordable as it was a few years ago, and we are starting to see some later-cycle behavior on this front," said Robert Kavcic, senior economist with BMO Capital Markets.

What else is on investors' radar?

The Chicago Fed national Activity Index rose to 0.65 in October, from 0.36 in September. Values above 0.70 have tended to mark a period of a sustained rise in inflation.

Federal Reserve Chairwoman Janet Yellen will give a talk at New York University at 6 p.m. Eastern. She said she would resign from the Fed's Board of Governors (http://www.marketwatch.com/story/janet-yellen-announces-shes-leaving-the-fed-2017-11-20)when her tenure as Fed chief comes to an end in February. Though her departure was expected, the rising vacancies on the Board adds uncertainty to how central bank policy will pan out in 2018.

What are other assets doing?

European government bonds extended its rally, kick-started by (http://www.marketwatch.com/story/heres-what-germanys-political-turmoil-means-for-global-markets-2017-11-20) German Chancellor Angela Merkel's failure to form a majority coalition. The German 10-year government bond yield fell 1.4 basis points to 0.351%. The French 10-year yield fell 4.4 basis points to 0.658%.

(END) Dow Jones Newswires

November 21, 2017 09:04 ET (14:04 GMT)

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