Following the rebound seen in the previous session, treasuries returned to the downside during the trading day on Wednesday.
Bond costs gained back some ground after coming under pressure early in the session but remained in unfavorable area. Subsequently, the yield on the benchmark ten-year note, which moves reverse of its cost, inched up by 1.7 basis points to 3.225 percent.
The early weakness among treasuries came following the release of a report from the Labor Department revealing producer rates increased in line with economic expert price quotes in the month of September.
The Labor Department stated its producer price index for final need increased by 0.2 percent in September after edging down by 0.1 percent in August. Economists had actually expected rates to rise by 0.2 percent.
Excluding declines in costs for food and energy, core producer costs still rose by 0.2 percent in September after slipping by 0.1 percent in August. The uptick in core rates likewise matched financial expert price quotes.
The report also said the annual rate of manufacturer cost growth slowed to 2.6 percent in September from 2.8 percent in August, while the yearly rate of core producer price growth accelerated to 2.5 percent from 2.3 percent.
On the other hand, traders mostly brushed off the results of the Treasury Department’s auctions of $36 billion worth of three-year notes and $23 billion worth of ten-year notes, which both attracted below par need.
The three-year note auction drew a high yield of 2.989 percent and a bid-to-cover ratio of 2.56, while the 10 previous three-year note auctions had a typical bid-to-cover ratio of 2.85.
The bid-to-cover ratio is a measure of demand that suggests the amount of bids for each dollar worth of securities being offered.
The ten-year note auction drew a high yield of 3.225 percent and a bid-to-cover ratio of 2.39 compared to the average bid-to-cover ratio of 2.62 in the 10 previous ten-year note auctions.
On Thursday, the Treasury is due to round off today’s long-term securities auctions with the sale of $15 billion worth of thirty-year bonds.
Trading on Thursday may also be impacted by response to the Labor Department’s reports on consumer price inflation and weekly jobless claims.
The material has been provided by InstaForex Business – www.instaforex.com