Treasuries Finish Volatile Session Moderately Higher

(RTTNews) - Treasuries saw some volatility during trading on Tuesday but managed to extend the upward trend seen over the past several sessions.

Bond prices moved to the upside going into the close, ending the day moderately higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 1.89 percent.

With the modest drop on the day, the ten-year yield added to recent losses, once again hitting its lowest closing level in well over a year.

The modestly higher close by treasuries was partly due to decreases in prices for crude oil and other commodities such as copper.

Crude for February delivery edged down $0.18 to $45.89 a barrel, while copper for March delivery slid $0.0815 to $2.644 a pound.

Treasuries also seemed to react positively to the results of the Treasury Department's auction of $21 billion worth of ten-year notes.

The ten-year note auction drew a high yield of 1.930 percent and a bid-to-cover ratio of 2.61, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.73.

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

Peter Boockvar, managing director at the Lindsey Group, described the auction as "mediocre" but said it is too early to say that investors are put off by sub-2 percent rates.

Following two quiet days on the U.S. economic front, trading on Wednesday could be impacted by reports on retail sales, business inventories, and import and export prices.

Traders are also likely to keep an eye on the results of the Treasury's auction of $13 billion worth of thirty-year bonds.