Treasuries Close Roughly Flat After Late-Day Recovery

(RTTNews) - After seeing moderate weakness for much of the session, treasuries recovered going into the close of trading on Wednesday to end the day roughly flat.

Bond prices climbed well off their worst levels but were unable to sustain the late upward move. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.135 percent.

The late-day recovery by treasuries may partly have reflected comments from European Union officials dismissing optimistic comments from Greek Prime Minister Alexi Tsipras regarding his nation's negotiations with creditors.

European Commission Vice President Valdis Dombrovskis noted the two sides are working toward an agreement as quickly as possible but still have a ways to go.

"We are working very intensively to ensure a staff-level agreement," Dombrovskis said. "We are still not there yet."

Earlier, Tsipras told reporters his government was close to an agreement to secure funding from its European and International Monetary Fund lenders.

The roughly flat close by treasuries may also have reflected trepidation ahead of the release of key U.S. reports on weekly jobless claims and pending home sales on Thursday.

Meanwhile, traders largely shrugged off the results of the Treasury Department's auction of $35 billion worth of five-year notes, which attracted below average demand.

The five-year note auction drew a high yield of 1.560 percent and a bid-to-cover ratio of 2.46, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.58.

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 $29 billion worth of seven-year notes on Thursday.