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Treasuries Move To The Downside Ahead Of Fed Announcement

After ending the previous session nearly flat, treasuries moved to the downside over the course of the trading day on Tuesday.

Bond prices moved steadily lower as the day progressed before closing firmly negative. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5.2 basis points to 1.622 percent.

The weakness among treasuries came as traders looked ahead to the Federal Reserve's monetary policy announcement on Wednesday.

The Fed is widely expected to maintain its ultra-easy monetary policy, but traders will be paying close attention to any changes to the accompanying statement that may signal a shift in the near future.

A report from the Conference Board showing consumer confidence reached its highest level since February of 2020 in the month of April may have reduced the appeal of safe havens like bonds.

The Conference Board said its consumer confidence index jumped to 121.7 in April after spiking to a revised 109.0 in March.

Economists had expected the consumer confidence index to rise to 112.0 from the 109.7 originally reported for the previous month.

Meanwhile, the Treasury Department revealed that this month's auction of $62 billion worth of seven-year notes attracted average demand.

The seven-year note auction drew a high yield of 1.306 percent and a bid-to-cover ratio of 2.31, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.33.

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

Looking ahead, the Fed's monetary policy announcement is likely to be in focus on Wednesday amid an otherwise quiet day on the U.S. economic front.

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