Treasuries See Further Downside After Yesterday's Pullback

(RTTNews) - After initially showing a lack of direction, treasuries came under pressure over the course of the trading session on Tuesday.

Bond prices climbed off their worst levels going into the close but remained firmly in the red. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.4 basis points to 1.862 percent.

With the increase on the day, the ten-year yield added to notable increase seen on Monday to reach a five-month closing high.

The continued weakness among treasuries came as traders awaited the results of today's highly anticipated presidential election.

The race between Democratic nominee Hillary Clinton and Republican rival Donald Trump has been among the most the divisive in history and the outcome could have a significant impact on economic policy.

As voters head to the polls, a RealClearPolitics average of recent national polls showed Clinton with a 46.8 percent to 43.6 percent lead over Trump.

However, the national poll numbers may not be indicative of the final result, which will likely come down to several key swing states due to the Electoral College system.

Treasuries remained in the red following the release of the results of the Treasury Department's auction of $24 billion worth of three-year notes, which attracted below average demand.

The three-year note auction drew a high yield of 1.034 percent and a bid-to-cover ratio of 2.69, while the ten previous three-year note auctions had an average bid-to-cover ratio of 2.82.

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

Reaction to the election results is likely to dominate trading on Wednesday, overshadowing data on wholesale inventories and an auction of $23 billion worth of ten-year notes.