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Treasuries Move To Upside As Coronavirus Concerns Resurface

After a relatively lackluster start, treasuries moved notably higher over the course of the trading session on Tuesday.

Bond prices climbed more firmly into positive territory in afternoon trading and seeing only modest strength in the morning. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.4 basis points to 0.650 percent.

The afternoon strength among treasuries came as stocks on Wall Street came under pressure amid resurfacing concerns about the coronavirus.

The renewed coronavirus concerns came as World Health Organization officials warned that the death toll from the pandemic may start to climb again.

The death toll has fallen in recent weeks despite the spike in new coronavirus cases in certain areas, but the WHO officials noted there is a lag between when a person contracts the disease and when they become seriously ill and potentially die.

"I don't think it should be a surprise if the deaths start to rise again. It will be very unfortunate, but it may happen," said Dr. Mike Ryan, Executive Director of the WHO Health Emergencies Programme.

Adding to the concerns, New York and New Jersey have added Delaware, Kansas and Oklahoma to the list of states from which travelers are required to self-quarantine for 14 days.

Atlanta Federal Reserve President Raphael Bostic also warned that the spike in coronavirus cases in southern and western states could slow the U.S. economic recovery.

Bostic noted in an interview with the Financial Times that high-frequency data had shown a "leveling off" of economic activity both in terms of business openings and mobility.

"There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise," Bostic said.

Meanwhile, the Treasury Department revealed that is auction of $46 billion worth three-year notes attracted average demand.

The three-year note auction drew a high yield of 0.190 percent and a bid-to-cover ratio of 2.44, while the ten previous three-year note auctions had an average bid-to-cover ratio of 2.46.

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

Amid another quiet day on the U.S. economic front, trading on Wednesday may be impacted by reaction to the results of the Treasury's auction of $29 billion worth of ten-year notes.

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