After moving modestly lower in early trading, treasuries turned higher over the course of the trading session on Wednesday.
Bond prices climbed well off their early lows to end the day in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3 basis points to 2.208 percent after hitting a high of 2.271 percent.
The rebound by treasuries came as stocks on Wall Street pulled back sharply after failing to sustain an early upward move.
A downturn by the price of crude oil weighed on stocks, leading traders to look for safe havens such as government-backed bonds.
Treasuries remained positive following the release of the results of the Treasury Department’s auction of $21 billion worth of ten-year notes, which attracted average demand.
The ten-year note auction drew a high yield of 2.233 percent and a bid-to-cover ratio of 2.64, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.63.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Finishing off this week’s series of long-term securities auctions, the Treasury is due to sell $13 billion worth of thirty-year bonds on Thursday.
Trading on Thursday may also be impacted by reaction to reports on weekly jobless claims and import and export prices.
The material has been provided by InstaForex Company – www.instaforex.com