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Treasuries Show Notable Move Back To The Upside

Treasuries showed a notable move to the upside during trading on Wednesday, regaining ground after moving sharply lower in recent sessions.

Bond prices showed a lack of direction in morning trading but climbed firmly into positive territory in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.2 basis points to 2.321 percent.

The pullback on the day came after the ten-year yield ended the previous session at its highest closing level since May 2019.

Treasuries benefited from their appeal as a safe haven amid lingering concerns about the ongoing war in Ukraine and a spike by the price of crude oil.

U.S. President Joe Biden is expected to impose further sanctions on Russia during his trip to Europe this week.

Further buying interest was generated after the Treasury Department revealed this month’s auction of $16 billion worth of twenty-year bonds attracted well above average demand.

The twenty-year bond auction drew a high yield of 2.651 percent and a bid-to-cover ratio of 2.72, while the ten previous twenty-year bond auctions had an average bid-to-cover ratio of 2.39.

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

In U.S. economic news, the Commerce Department released a report unexpectedly showing a continued decrease in new home sales in the month of February.

The report showed new home sales slumped by 2.0 percent to an annual rate of 772,000 in February after plunging by 8.4 percent to a revised rate of 788,000 in January.

The continued decline surprised economists, who had expected new home sales to jump by 1.1 percent to a rate of 810,000 from the 801,000 originally reported for the previous month.

Trading on Thursday may be impacted by reaction to a pair of reports on durable goods orders and weekly jobless claims.

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