Plus   Neg

Treasuries Turn Positive On Strong Demand For Thirty-Year Bond Auction

After moving modestly lower early in the session, treasuries rebounded over the course of the trading day on Thursday.

Bond prices climbed well off their lows of the day and into positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.6 basis points to 1.858 percent.

The turnaround by treasuries came as the Treasury Department revealed its auction of $16 billion worth of thirty-year bonds attracted strong demand.

The thirty-year bond auction drew a high yield of 2.341 percent and a bid-to-cover ratio of 2.54, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.26.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Treasuries moved to the downside early in the session amid easing concerns about the conflict between the U.S. and Iran.

President Donald Trump indicated in remarks on Wednesday that the U.S. would not respond militarily to the Iranian missile strikes on Iraqi bases housing U.S. troops.

Trump had previously threatened a harsh response to any attack by Iran but now says he will only impose new sanctions on Iran's already struggling economy.

Nonetheless, overall trading activity was somewhat subdued ahead of the release of the Labor Department's monthly jobs report on Friday.

Economists expect employment to increase by 164,000 jobs in December after spiking by 266,000 jobs in November, while the unemployment rate is expected to hold at 3.5 percent.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT