Extending the sell-off seen over the past several sessions, treasuries saw notable weakness during trading on Wednesday.
Bond prices came under pressure in early trading and remained firmly negative throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, advanced by 6.1 basis points to 2.478 percent.
With the increase, the ten-year yield extended a recent upward trend, reaching its highest closing level in well over eight months.
The continued weakness among treasuries partly reflected the recent downward momentum shown by the bond markets.
Treasuries extended their recent downward move despite a lack of major catalysts, specifically any major U.S. economic data.
Some selling pressure was generated by a continued decrease by German bonds, which have been selling off along with treasuries in recent sessions.
Meanwhile, traders largely shrugged off the results of the Treasury Department’s auction of $21 billion worth of ten-year notes, which attracted slightly above average demand.
The ten-year note auction drew a high yield of 2.461 percent and a bid-to-cover ratio of 2.74, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.68.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
U.S. economic data is likely to move back into the spotlight on Thursday, with traders likely to keep an eye on reports on weekly jobless claims, retail sales, and import and export prices.
Bond trading could also be impacted by reaction to the Treasury’s auction of $13 billion worth of thirty-year bonds.
The material has been provided by InstaForex Company – www.instaforex.com