Treasuries Close Notably Higher But Off Best Levels Of The Day

(RTTNews) - After turning higher over the course of the previous session, treasuries saw some further upside during trading on Thursday.

Bond prices showed a strong upward move in early trading but ended the session well off their best levels. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.1 basis points to 1.644 percent.

The ten-year yield climbed well off its intraday low of 1.567 percent but still ended the session at its lowest closing level since May of 2013.

The continued strength among treasuries was partly due to a global sell-off by stocks, with overseas weakness weighing on Wall Street.

Ongoing risk aversion contributed to steep losses by stocks along with a continued decrease by the price of crude oil.

After falling $0.49 to $27.45 a barrel in the previous session, crude for March delivery tumbled $1.24 to a nearly thirteen-year closing low of $26.21 a barrel.

Oversupply concerns continued to weigh on oil prices, although crude regained some ground in electronic trading after the Wall Street Journal reported OPEC members might be ready to cooperate on a cut in production.

Traders also kept an eye on remarks by Federal Reserve Chair Janet Yellen, who testified before the Senate Banking Committee in her second day on Capitol Hill.

During the question-and-answer portion of her appearance, Yellen acknowledged there is the chance of a recession ahead and said the Fed would not take the possibility of imposing negative interest rates off the table.

Meanwhile, traders largely shrugged off the results of the Treasury Department's auction of $15 billion worth of thirty-year bonds, which attracted below average demand.

The thirty-year bond auction drew a high yield of 2.50 percent and a bid-to-cover ratio of 2.09, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.35.

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

Today's thirty-year bond auction came after the Treasury sold $24 billion worth of three-year notes on Tuesday and $23 billion worth of ten-year notes on Wednesday.

Following several quiet days on the U.S. economic front, trading on Friday may be impacted by the release of reports on retail sales, import and export prices, and consumer sentiment.