Treasuries Fluctuate Before Closing Slightly Lower

(RTTNews) - Following the sell-off seen on Wednesday, treasuries fluctuated over the course of the trading session on Thursday before eventually closing slight lower.

Bond prices regained ground in the afternoon after turning lower over the course of the morning but ended the day in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by 1.6 basis points to 4.576 percent.

With the uptick, the ten-year yield added to the 19.4 basis point spike seen in the previous session, reaching its highest closing level in nearly five months.

The volatility on the day came as traders weighed today's relatively tame producer price inflation data against yesterday's hotter-than-expected consumer price inflation data.

Early in the session, the Labor Department released a report showing producer prices increased in line with economist estimates in the month of March.

The Labor Department said its producer price index for final demand crept up by 0.2 percent in March after climbing by 0.6 percent in February. The uptick matched expectations.

Meanwhile, the report said the annual rate of producer price growth accelerated to 2.1 percent in March from 1.6 percent in February.

The annual rate of growth was the fastest since surging 2.3 percent last April but came in slightly slower than the 2.2 percent jump forecast by economists.

The producer price inflation data came after the Labor Department released a separate report on Wednesday showing consumer prices rose by slightly more than expected in March.

The report also said the annual rate of consumer price growth accelerated to 3.5 percent in March from 3.2 percent in February. Economists had expected a more modest acceleration to 3.4 percent.

Bond prices climbed off their worst levels in afternoon trading as the Treasury Department revealed this month's auction of $22 billion worth of thirty-year bonds attracted average demand.

The thirty-year bond auction drew a high yield of 4.671 percent and a bid-to-cover ratio of 2.37, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.39.

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

The Treasury revealed below average demand for this month's three-year and ten-year note auctions earlier in the week.

A report on import and export prices may attract attention on Friday along with a report on consumer sentiment that includes readings on inflation expectations.