Treasuries Close Modestly Higher After Seeing Early Weakness

(RTTNews) - After seeing early weakness, treasuries moved modestly higher over the course of the trading session on Wednesday.

Bond prices climbed well off their early lows to end the day slightly above the unchanged line. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 1.685 percent.

The rebound by treasuries came following the release of the results of the Treasury Department's auction of $28 billion worth of seven-year notes.

The seven-year note auction drew a high yield of 1.497 percent and a bid-to-cover ratio of 2.56, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.51.

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

Traders may also have been looking at treasuries as a safe haven ahead of tomorrow's referendum on whether Britain will remain in the European Union.

Recent polls have shown voters divided on the so-called Brexit, suggesting the referendum could still go either way despite recent optimism about the outcome.

On the U.S. economic front, the National Association of Realtors released a report showing that existing home sales rose to their highest level in over nine years in May.

NAR said existing home sales rose by 1.8 percent to an annual rate of 5.53 million in May from a downwardly revised 5.43 million in April.

Economists had expected existing home sales to climb 2.2 percent to a rate of 5.57 million from the 5.45 million originally reported for the previous month.

While existing home sales increased by slightly less than expected, the rate of sales in May was the highest since reaching 5.79 million in February of 2007.

Traders are likely to focus on the latest news regarding the Brexit vote on Thursday, which may overshadow U.S. reports on weekly jobless claims, new home sales, and leading economic indicators.