Treasuries Extend Sell-Off Seen In Previous Session

(RTTNews) - Following the sell-off seen in the previous session, treasuries saw some further downside during trading on Thursday.

After coming under pressure in early trading, treasuries regained some ground only to move back to the downside in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.5 basis points to 2.117 percent.

With the increase on the day, the ten-year yield added to the 21 basis point jump seen on Wednesday to reach its highest closing level in ten months.

The sustained weakness among treasuries came as traders continued to digest President-elect Donald Trump's surprise victory, with the real estate tycoon's proposed policies expected to increase inflationary pressures.

Results of the Treasury Department's auction of $15 billion worth of thirty-year bonds showing below average demand also weighed on treasuries.

The thirty-year bond auction drew a high yield of 2.902 percent and a bid-to-cover ratio of 2.11, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.30.

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's auctions of $24 billion worth of three-year notes on Tuesday and $23 billion worth of ten-year notes on Wednesday also attracted below average demand.

Following the Veterans Day holiday on Friday, next week's trading may be impacted by a slew of U.S. economic data, including reports on retail sales, producer and consumer prices, industrial production, and housing starts.