Treasuries Close Moderately Higher Amid Worries About Greece

(RTTNews) - After initially showing a lack of direction, treasuries moved moderately higher over the course of the trading day on Wednesday.

Bond prices moved steadily higher in afternoon trading before closing firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.8 basis points to 2.371 percent.

The strength that emerged among treasuries came as the latest developments regarding Greece's negotiations with its creditors offset recent optimism about a potential deal.

Greece put forward new proposals earlier this week that were touted as a sign of progress, but the offer was subsequently rejected.

Greek Prime Minister Alexis Tsipras claimed the international creditors are rejecting equivalent measures that were accepted for Portugal and Ireland.

"This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed," Tsipras said in a post on Twitter.

The troika of creditors, which includes the European Commission, the European Central Bank, and the International Monetary Fund, has put forward a set of counterproposals.

A Greek government official told Reuters the new proposal puts an unfair burden on wage earners and pensioners and cannot be accepted.

Negotiations are expected to continue on Thursday after a meeting of European financial ministers ended without a resolution this afternoon.

The continued back-and-forth comes as Greece is faced with a 1.5 billion euro payment to the IMF at the end of month. Greece has indicated that it will not be able to make the payment without further aid.

Meanwhile, bond traders largely shrugged off the results of the results of the Treasury Department's auction of $35 billion worth of five-year notes, which attracted below average demand.

The five-year note auction drew a high yield of 1.710 percent and a bid-to-cover ratio of 2.39, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.54.

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 Thursday, the Treasury is due to finish off this week's series of long-term securities auctions with the sale of $29 billion worth of seven-year notes.

Reports on weekly jobless claims and personal income and spending may also attract some attention on Thursday, although the data is likely to be overshadowed by the latest headlines regarding Greece.