2018.11.0716:10:00UTC+00Treasuries Close Roughly Flat After Pulling Back Off Early Highs

After moving higher early in the trading day on Wednesday, treasuries pulled back over the course of the session before closing roughly flat.

Bond prices pulled back well off their highs in afternoon trading, ending the day near the unchanged line. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 3.213 percent.

The pullback by treasuries came following the release of the results of the Treasury Department's auction of $19 billion worth of thirty-year bonds, which attracted below average demand.

The thirty-year bond auction drew a high yield of 3.418 percent and a bid-to-cover ratio of 2.06, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.32.

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

Today's thirty-year bond auction came after the Treasury sold $37 billion worth of three-year notes on Monday and $27 billion worth of ten-year notes on Tuesday.

The early strength among treasuries came as the results of the highly anticipated midterm elections on Tuesday came largely in line with expectations.

Democrats are projected to retake control of the House for the first time since 2010, as Democratic candidates managed to flip a number of suburban districts across the country.

Control of the House will give Democrats subpoena power, potentially leading to numerous investigations of President Donald Trump's administration.

House Democrats will also play a much larger role if Trump hopes to achieve any major legislative accomplishments in the next two years.

Meanwhile, Democrats did not fare as well as in the Senate, as Republicans appear poised to expand their majority in the upper chamber.

Republican candidates won Democratic Senate seats in Indiana, Missouri, and North Dakota and are leading in tight races in Florida, Arizona, and Montana.

The GOP had been seen as likely to maintain control of the Senate due to the tough map faced by Democrats, who were defending 26 of the 35 seats on the ballot.

With Republicans expanding their majority, Trump will likely have an easier time pushing through more controversial judicial nominees.

Despite Republicans losing control of the House, Trump described the night as a "tremendous success" in a post on Twitter.

Trading on Thursday is likely to be driven by reaction to the Federal Reserve's monetary policy announcement due tomorrow afternoon.

The Fed is widely expected to leave interest rates unchanged, but traders will keep a close eye on the accompanying statement for clues about an expected rate hike in December.