Treasuries Move Back To The Upside Following Recent Weakness

(RTTNews) - After trending lower over the past two weeks, treasuries regained some ground over the course of the trading day on Wednesday.

Bond prices moved moderately higher in early trading and saw some further upside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.3 basis points to 2.725 percent.

With the decrease on the day, the ten-year yield gave back some ground after ending the previous session at its highest closing level in well over a month.

The strength among treasuries was partly due to bargain hunting, with the recent increase in yields increasing the appeal of bonds.

Treasuries continued to perform well following the release of the results of the Treasury Department's auction of $24 billion worth of ten-year notes, which attracted average demand.

The ten-year note auction drew a high yield of 2.750 percent and a bid-to-cover ratio of 2.70, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.72.

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 activity may pick up on Thursday amid the release of reports on the U.S. trade balance, weekly jobless claims, and labor productivity.

The Senate Banking Committee's hearing on Janet Yellen's nomination to be the next Federal Reserve Chairman is also likely to be in focus.

The Treasury Department is also due to sell $16 billion worth of thirty-year bonds, finishing off this week's series of long-term securities auctions.