Treasuries Extend Downward Trend Amid Focus On Greece

(RTTNews) - Extending the downward trend seen over the past several sessions, treasuries moved moderately lower during trading on Tuesday.

Bond prices came under pressure in early trading and remained stuck in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.3 basis points to 1.991 percent.

With the increase, the ten-year yield closed higher for the sixth consecutive session, reaching its highest closing level in a month.

The early weakness among treasuries was partly due to easing concerns about the Greek debt negotiations amid reports that eurozone officials are considering extending Greece's bailout program by up to six months.

Reports said the European Commission planned to offer the proposal amid indications that the new Greek government is softening its rhetoric behind the scenes.

Peter Boockvar, managing director at the Lindsey Group, said comments by Finance Minister Yanis Varoufakis suggesting that Greece will adhere to 70 percent of the reforms in the current bailout agreement seemed to have been the first step of backing off their original demands.

Meanwhile, bond traders seemed to shrug off comments from German Finance Minister Wolfgang Schaeuble, who declared the reports about a six-month extension "false."

Schaeuble claimed that an emergency meeting of euro area finance ministers on Wednesday will not result in a new bailout agreement for Greece.

Treasuries saw continued weakness following the release of the results of the Treasury Department's auction of $24 billion worth of three-year notes.

The three-year note auction drew a high yield of 1.050 percent and a bid-to-cover ratio of 3.34, while the ten previous three-year note auctions had an average bid-to-cover ratio of 3.29.

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

Amid a lack of major U.S. economic data, trading on Wednesday may be impacted by the latest developments regarding the Greek debt negotiations.

Bond traders are also likely to keep an eye on the results of the Treasury's auction of $24 billion worth of ten-year notes.