Treasuries Close Nearly Flat After Seeing Early Strength

(RTTNews) - After failing to sustain an initial upward move, treasuries gave back ground over the course of the trading day on Wednesday before closing roughly flat.

Bond prices dipped into the red in late-day trading but managed to recover going into the close. 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 2.359 percent.

The early strength among treasuries was partly due to ongoing uncertainty about the European economic outlook, which increased the appeal of U.S. government debt.

Renewed geopolitical concerns may also have boosted treasuries amid reports of Russian combat troops entering Ukraine.

Buying interest waned over the course of the morning, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Treasuries continued to pullback off their highs following the release of the results of the Treasury Department's auction of $24 billion worth of ten-year notes.

The ten-year note auction drew a high yield of 2.365 percent and a bid-to-cover ratio of 2.52, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.70.

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 $16 billion worth of thirty-year bonds on Thursday.

Thursday's trading could also be impacted by reaction to the Labor Department's weekly jobless claims report as well as data on job openings and labor turnover.