Treasuries See Further Downside Amid Interest Rate Uncertainty

(RTTNews) - Extending the downward trend seen over the past several sessions, treasuries moved moderately lower during trading on Wednesday.

Bond prices came under pressure in early trading and remained firmly in negative territory throughout the season. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.4 basis points to 2.534 percent.

With the increase of the day, the ten-year yield closed higher for the fifth consecutive session, reaching its highest closing level in over a month.

The continued weakness among treasuries was partly due to renewed uncertainty about the outlook for interest rates amid a sell-off in global bond markets.

Analysts continue to point to a report from the San Francisco Fed that said the public seems to expect more accommodative monetary policy than the central bank's projections suggest.

The public also appears to be less uncertain about the future course of monetary policy than FOMC participants, the San Francisco Fed said.

Treasuries remained firmly in the red following the release of the results of the Treasury Department's auction of $21 billion worth of ten-year notes, which drew a high yield of 2.535 percent and a bid-to-cover ratio of 2.71.

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

Peter Boockvar, managing director at the Lindsey Group, said, "After an uneventful 3-year note auction yesterday, the benchmark 10-year auction today was as well."

"The yield of 2.535% was exactly in line with where the when issued was trading and the bid to cover of 2.71 was right in line with the previous 12 month average," he added.

The Treasury is due to finish off this week's series of long-term securities auctions with the sale of $13 billion worth of thirty-year bonds on Thursday.

Trading on Thursday could also be impacted by the release of the Labor Department's report on weekly jobless claims.