Treasuries Close Nearly Unchanged Following Choppy Trading Day
Treasuries fluctuated over the course of the trading session on Thursday before ending the day near the unchanged line.
Bond prices came under pressure over the course of morning trading but recovered in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 2.756 percent.
The slight increase on the day came after the ten-year yield ended the previous session at its lowest closing level in well over a month.
The pullback seen in morning trading came as stocks on Wall Street moved sharply higher, extending the upward move seen in the previous session.
Stocks benefited from bargain hunting as well as a report from the Labor Department showing first-time claims for U.S. unemployment benefits pulled back by more than expected in the week ended May 21st.
The report showed initial jobless claims dipped to 210,000, a decrease of 8,000 from the previous week’s unrevised level of 218,000. Economists had expected jobless claims to edge down to 215,000.
However, treasuries rebounded in afternoon trading after the Treasury Department revealed this month’s auction $42 billion worth of seven-year notes sale attracted well above average demand.
The seven-year note auction drew a high yield of 2.777 percent and a bid-to-cover ratio of 2.69, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.33.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Earlier this week, the Treasury revealed this month’s two-year note auction attracted modestly above average demand, while this month’s five-year note auction attracted average demand.
A report on personal income and spending is likely to be in focus on Friday, as it includes a reading on inflation said to be preferred by the Federal Reserve.
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