2021.06.2319:11:00UTC+00Treasuries Show Modest Move To The Downside

After showing a lack of direction early in the session, treasuries moved modestly lower over the course of the trading day on Wednesday.

Bond prices lingered in negative territory in afternoon trading after spending the morning bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.5 basis points to 1.487 percent.

The modestly lower close by treasuries came after the Treasury Department revealed this month's auction of $61 billion worth of five-year notes attracted modestly below average demand.

The five-year note auction drew a high yield of 0.904 percent and a bid-to-cover ratio of 2.36, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.41.

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

In U.S. economic news, a report released by the Commerce Department unexpectedly showed another steep drop in new home sales in the U.S. in the month of May.

The Commerce Department said new home sales tumbled by 5.9 percent to an annual rate of 769,000 in May after plunging by 7.8 percent to a downwardly revised rate of 817,000 in April.

The continued decrease surprised economists, who had expected new home sales to climb 0.8 percent to a rate of 870,000 from the 863,000 originally reported for the previous month.

Overall trading activity was somewhat subdued, however, as traders looked ahead to Thursday's reports on initial jobless claims and durable goods orders.

The Treasury is also scheduled to announce the results of this month's auction of $62 billion worth of seven-year notes.