Treasuries Show Notable Move To The Downside

(RTTNews) - After ending the previous session roughly flat, treasuries showed a notable move to the downside during trading on Tuesday.

Bond prices moved steadily lower over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4 basis points to 2.977 percent.

The drop by treasuries came amid strength on Wall Street, with stocks regaining ground following recent weakness.

Trading activity remained somewhat subdued, however, as a lack of major U.S. economic data kept some traders on the sidelines.

In the coming days, trading may be impacted by reaction to reports on producer and consumer price inflation, retail sales and industrial production as well as the Federal Reserve's Beige Book.

Treasuries saw further downside following the release of the results of the Treasury Department's auction of $35 billion worth of three-year notes, which attracted below average demand.

The three-year note auction drew a high yield of 2.821 percent and a bid-to-cover ratio of 2.68, while the ten previous three-year note auctions had an average bid-to-cover ratio of 2.86.

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

Trading on Wednesday may be impacted by reaction to a report on producer price inflation as well as the Federal Reserve's Beige Book.