Treasuries Extend Upward Trend Amid Sell-Off On Wall Street

(RTTNews) - Treasuries moved notably higher over the course of the trading day on Thursday, extending the upward trend seen throughout the past week.

Bond prices moved steadily higher in morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.6 basis points to 2.628 percent.

With the drop on the day, the ten-year yield closed lower for the fifth time in six sessions, falling to its lowest closing level in over a month.

The strength among treasuries came as traders continued to digest the minutes of the latest Federal Reserve meeting, which eased concerns about the outlook for interest rates.

The minutes revealed that some meeting participants expressed concern that the increase in the median projection for the federal funds rate could be misconstrued.

Treasuries also benefited from another sell-off on Wall Street, with traders moving their money out of risky assets such as stocks and into safer havens like bonds.

The Dow has plummeted by more than 250 points, while the tech-heavy Nasdaq is turning in one of its worst performances in years.

Buying interest in the bond market was sustained following the release of the results of the Treasury Department's auction of $13 billion worth of thirty-year bonds, which attracted above average demand.

The thirty-year bond auction drew a high yield of 3.525 percent and a bid-to-cover ratio of 2.52, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.36.

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

Peter Boockvar, managing director at the Lindsey Group, said, "Even with a yield at the lowest level since July 2013, the 30-year note auction was pretty good following the very mixed 10-year yesterday and uneventful 3-year on Tuesday."

Today's thirty-year bond auction came after the Treasury sold $30 billion worth of three-year notes on Tuesday and $21 billion worth of ten-year notes on Wednesday.

Meanwhile, traders seemed to shrug off a report from the Labor Department showing that initial jobless claims fell to a nearly seven-year low in the week ended April 5th.

Traders may pay closer attention to the release of reports on producer price inflation and consumer sentiment on Friday.