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Treasuries Fluctuate Before Closing Moderately Lower

Treasuries fluctuated over the course of the trading session on Wednesday before eventually ending the day moderately lower.

Bond prices moved to the downside going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points to 0.764 percent.

The lower close by treasuries came as stocks on Wall Street moved sharply higher over the course of the trading day.

Stocks continued to benefit from optimism that some of the countries hit hardest by the coronavirus pandemic are flattening the infection curve.

Data from Johns Hopkins University shows confirmed coronavirus cases in the U.S. have reached more than 400,000, the most in the world.

However, the latest data from the university also shows that the number of new cases has decreased in recent days after reaching a peak last Friday.

The number of new coronavirus cases has also recently shown significant downturns in Italy and Spain, which currently have the most confirmed cases in Europe.

Adding to the positive sentiment, White House health advisor Dr. Anthony Fauci told Fox News the U.S. could see the “beginning of a turnaround” after a “bad week for deaths” this week.

Fauci noted deaths are a lagging indicator and pointed to the decrease in the number of new cases and a lower rate of hospitalizations.

Further buying interest was generated in reaction to news Senator Bernie Sanders, I-Vt., is dropping out of the race for the Democratic presidential nomination.

Sanders’ decision to end his presidential campaign sets up a general election matchup between President Donald Trump and former Vice President Joe Biden.

With the campaign virtually shut down due to the coronavirus pandemic, Sanders was widely seen as unlikely to overtake Biden in the race for delegates.

Nonetheless, the move by Sanders still seems to have soothed investors concerned about the self-described Democratic Socialist enacting his more progressive policies.

Bond traders largely shrugged off the results of the Treasury Department’s auction of $17 billion worth of thirty-year bonds, which attracted slightly above average demand.

The thirty-year bond auction drew a high yield of 1.325 percent and a bid-to-cover ratio of 2.35, 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.

The Treasury revealed earlier this week that its auction of $40 billion worth of three-year notes attracted below average demand, while its auction of $25 billion worth of ten-year notes attracted average demand.

Looking ahead, the weekly jobless claims report is likely to in the spotlight on Thursday, as traders look for the latest readings on the coronavirus pandemic’s impact on the economy.

Remarks by Federal Reserve Chairman Jerome Powell may also attract attention along with reports on producer price inflation and consumer sentiment.

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