Treasuries moved to the downside during trading on Wednesday, extending the notable pullback seen in the previous session.
Bond prices came under pressure early in the session and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4 basis points to 1.630 percent.
The continued weakness among treasuries came amid easing concerns about the economic impact of the coronavirus outbreak.
While China’s National Health Commission reported 2,015 new confirmed coronavirus cases and 97 additional deaths, a recent slowdown in the rate of growth in new infections has led to optimism the outbreak is being contained.
Traders also kept an eye on Federal Reserve Chairman Jerome Powell’s testimony before the Senate Banking Committee.
Powell’s prepared remarks mirrored those he delivered before the House Financial Services Committee on Tuesday.
In his prepared remarks, Powell said the Fed is closely monitoring the coronavirus outbreak but also highlighted the resilience of the U.S. economy.
Meanwhile, treasuries showed almost no reaction to the results of the Treasury Department’s auction of $27 billion worth of ten-year notes, which attracted well above average demand.
The ten-year note auction drew a high yield of 1.622 percent and a bid-to-cover ratio of 2.58, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.41.
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 is scheduled to announce the results of its auction of $19 billion worth of thirty-year bonds on Thursday.
Trading on Thursday is more likely to be impacted by reaction to any coronavirus news as well as the release of reports on consumer price inflation and weekly jobless claims.
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