Treasuries Move Modestly Higher After Seeing Early Weakness

(RTTNews) - Treasuries recovered from early weakness to end Tuesday's session slightly higher and turned in a similar performance during trading on Thursday.

Bond prices spent the morning in negative territory before showing a notable rebound in afternoon trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 4.579 percent after reaching a high of 4.641 percent.

Once again, the rebound by treasuries came after the Treasury Department released the results of its long-term securities auctions.

While Tuesday's recovery came after the Treasury released the results of its five-year note auction, today's rebound came after the Treasury revealed this month's auction of $44 billion worth of seven-year notes attracted above average demand.

The seven-year note auction drew a high yield of 4.532 percent and a bid-to-cover ratio of 2.76, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.59.

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

The turnaround by treasuries may also have reflected bargain hunting after the ten-year yield reached its highest intraday level in nearly seven months.

Trading activity remained subdued, however, as many traders were still away from their desks following the Christmas Day holiday on Wednesday.

Light trading is likely to persist on Friday, with a lack of major U.S. economic data likely to keep traders on the sidelines.