Ten-Year Yield Slumps To Five-Month Closing Low

(RTTNews) - After moving modestly higher over the course of the previous session, treasuries showed a more significant move to the upside during trading on Wednesday.

Bond prices advanced early in the day and climbed more firmly into positive territory as the session progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 9.7 basis points to 3.789 percent.

The ten-year yield added to the 1.5 basis point dip seen on Tuesday, falling to its lowest closing level in over five months.

Treasuries reached new highs for the session after the Treasury Department revealed this month's auction of $58 billion worth of five-year notes on attracted average demand.

The five-year note auction drew a high yield of 3.801 percent and a bid-to-cover ratio of 2.50, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.51.

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

On Tuesday, the Treasury revealed this month's auction of $57 billion worth of two-year notes also attracted roughly average demand.

The Treasury is due to announce the results of this month's auction of $40 billion worth of seven-year notes on Thursday.

Reports on weekly jobless claims and pending home sales may also attract some attention on Thursday, although trading activity is likely to remain subdued ahead of the New Year's weekend.