2021.03.0919:18:00UTC+00Treasuries Show Notable Move Back The Upside

Treasuries showed a strong move back to the upside during trading on Tuesday, offsetting the drop seen in the previous session.

Bond prices advanced early in the session and remained firmly positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5 basis points to 1.546 percent.

The rebound by treasuries came as traders looked to pick up bonds at reduced levels following the steep drop seen over the past few weeks.

Treasuries saw notable weakness on Monday after the Senate passed a $1.9 trillion coronavirus relief bill over the weekend, pushing the ten-year yield to its highest closing level in over a year.

The higher close by treasuries also came after the Treasury Department revealed strong demand for its auction of $58 billion worth of three-year notes.

The three-year note auction drew a high yield of 0.355 percent and a bid-to-cover ratio of 2.69, while the ten previous three-year note auctions had an average bid-to-cover ratio of 2.43.

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 Treasury is due to announce the results of its auctions of $38 billion worth of ten-year notes on Wednesday.

Trading on Wednesday may also be impacted by reaction to a Labor Department report on consumer prices, as concerns about inflation have contributed to the recent jump in yields.