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Treasuries Close Modestly Higher After Thirty-Year Bond Auction

After ending the previous session roughly flat, treasuries moved modestly higher over the course of the trading session on Thursday.

Bond prices showed a lack of direction in morning trading before moving to the upside in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.2 basis points to 2.323 percent.

With the modest decrease on the day, the ten-year yield pulled back further off the nearly three-month closing high set last Friday.

The upward move by treasuries came following the release of the results of the Treasury Department's auction of $12 billion worth of thirty-year bonds, which attracted above average demand.

The thirty-year bond auction drew a high yield of 2.870 percent and a bid-to-cover ratio of 2.53, while the ten previous thirty-year bonds auctions had an average bid-to-cover ratio of 2.29.

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

Today's thirty-year bond auction came after the Treasury sold $24 billion worth of three-year notes and $20 billion worth of ten-year notes on Wednesday.

On the U.S. economic front, the Labor Department released a report showing producer prices increased in line with economist estimates in the month of September.

The Labor Department said its producer price index for final demand climbed by 0.4 percent in September after edging up by 0.2 percent in August.

Excluding food and energy prices, core producer prices still rose by 0.4 percent in September after inching up by 0.1 percent in August. Core prices had been expected to rise by 0.2 percent.

A separate Labor Department report showed first-time claims for unemployment benefits fell by more than anticipated in the week ended October 7th.

The report said initial jobless claims dropped to 243,000, a decrease of 15,000 from the previous week's revised level of 258,000. Economists had expected jobless claims to dip to 251,000.

Economic data may be in focus on Friday, with traders likely to keep an eye on reports on retail sales and consumer price inflation.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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