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Treasuries Show A Continued Move To The Downside

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Treasuries moved to the downside during trading on Monday, extending the downward trend seen over the past several sessions.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 6.7 basis points to 2.780 percent.

The ten-year yield closed higher for the seventh consecutive session, reaching its highest closing level in over three years.

The continued weakness among treasuries came as traders continued to express concerns about the outlook for monetary policy.

Reports on consumer and producer price inflation, retail sales and industrial production are likely to attract attention in the coming days.

The data may impact expectations regarding how aggressively the Federal Reserve plans to tighten monetary policy.

Meanwhile, traders largely shrugged off the results of the Treasury Department’s auction of $46 billion worth of three-year notes, which attracted slightly above average demand.

The three-year note auction drew a high yield of 2.738 percent and a bid-to-cover ratio of 2.48, while the ten previous three-year note auctions had an average bid-to-cover ratio of 2.43.

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 announce the results of this month’s auctions of $34 billion worth of ten-year notes and $20 billion worth of thirty-year bonds on Tuesday and Wednesday, respectively.

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