Treasuries Close Nearly Flat Following Lackluster Session

(RTTNews) - Treasuries showed a lack of direction over the course of the trading session on Tuesday before ending the day roughly flat.

Bond prices fluctuated as the day progressed before closing near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.758 percent.

The choppy trading by treasuries came following the release of a report from the Conference Board showing a bigger than expected drop in consumer confidence in the month of October.

The Conference Board said its consumer confidence index fell to 98.6 in October after climbing to 103.5 in September. Economists had expected the index to drop to 101.0.

"Consumers' assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat," said Lynn Franco, Director of Economic Indicators at the Conference Board.

She added, "Overall, sentiment is that the economy will continue to expand in the near-term, but at a moderate pace."

Traders were also digesting the results of the Treasury Department's auction of $26 billion worth of two-year notes, which attracted below average demand.

The two-year note auction drew a high yield of 0.855 percent and a bid-to-cover ratio of 2.53, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.76.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Trading on Wednesday may be impacted by reaction to a report on new home sales as well as the results of the Treasury's auction of $34 billion worth of five-year notes.