Treasuries Close Slightly Lower Following Choppy Trading Day

Treasuries showed a lack of direction over the course of the trading session on Wednesday before ending the day slightly lower.

Bond prices spent the morning bouncing back and forth across the unchanged line but moved to the downside in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 1.574 percent.

The pullback shown by treasuries in afternoon trading came even though the Treasury Department revealed its auction of $61 billion worth of five-year notes attracted slightly above average demand.

The five-year note auction drew a high yield of 0.788 percent and a bid-to-cover ratio of 2.49, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.40.

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

The Treasury revealed on Tuesday that this month's auction of $60 billion worth of two-year notes also attracted above average demand.

On Thursday, the Treasury is scheduled to announce the results of this month's auction of $62 billion worth of seven-year notes.

Trading on Thursday may also be impacted by reaction to reports on weekly jobless claims, durable goods orders and pending home sales.

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