Treasuries Move Notably Lower Amid Rally On Wall Street

Treasuries showed a notable move to the downside during trading on Wednesday, extending the steep drop seen in the previous session.

Bond prices moved moderately lower early in the session and slid more firmly into negative territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.6 basis points to 1.948 percent.

The continued weakness among treasuries came amid a rally on Wall Street, with stocks rebounding strongly after closing lower for four straight sessions.

Stocks benefited from a sharp pullback by commodities prices, which helped ease concerns about the recent surge contributing to even higher inflation.

The rally on Wall Street also reflected bargain hunting, as traders looked to pick up stocks at reduced levels following the recent weakness.

Treasuries saw further downside in afternoon trading after the Treasury Department revealed this month’s auction of $34 billion worth of ten-year notes attracted slightly below average demand.

The ten-year note auction drew a high yield of 1.920 percent and a bid-to-cover ratio of 2.47, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.52.

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

Activity in the commodities markets may continue to impact trading on Thursday, while traders are also likely to keep an eye on reports on consumer price inflation and weekly jobless claims.

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