Treasuries Close Roughly Flat Following Volatile Trading Session

(RTTNews) - Treasuries showed a lack of direction over the course of the trading day on Monday before eventually ending the session roughly flat.

After coming under pressure in early trading, bond prices rebounded as the day progressed before pulling back near the unchanged line going into the close.

Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.924 percent.

The choppy trading seen throughout much of the session came as traders seemed reluctant to make any significant moves ahead of the Federal Reserve's monetary policy announcement.

The Fed is scheduled to hold a two-day meeting this week, culminating with the announcement of its latest policy decision Wednesday afternoon.

The central bank is not expected to announce an increase in interest rates, but traders will be paying close attention for any hints at a rate hike at the June meeting. A recent batch of disappointing economic data has led many analysts to predict that the Fed will delay its first rate hike until later in the year.

Meanwhile, traders largely shrugged off the results of the Treasury Department's auction of $26 billion worth of two-year notes, which attracted slightly below average demand.

The two-year note auction drew a high yield of 0.540 percent and a bid-to-cover ratio of 3.30, while the ten previous two-year note auctions had an average bid-to-cover ratio of 3.42.

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 auction $35 billion worth of five-year notes on Tuesday and $29 billion worth of seven-year notes on Wednesday.

Reports on home prices and consumer confidence may also attract some attention on Tuesday, although activity is likely to remain subdued ahead of the looming Fed announcement.