Treasuries Close Roughly Flat Following Choppy Trading Day

(RTTNews) - Treasuries showed a lack of direction over the course of the trading session on Wednesday before ending the day roughly flat.

Bond prices spent the day 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 less than a basis point to 1.559 percent.

The choppy trading on the day came as traders continued to look ahead to a speech by Federal Reserve Chair Janet Yellen later in the week.

Yellen is due to speak at the Kansas City Fed's monetary policy symposium in Jackson Hole, Wyoming, on Friday, and traders are likely to look for clues about the outlook for interest rates in her remarks.

Traders largely shrugged off the results of the Treasury Department's auction of $34 billion worth of five-year notes, which attracted above average demand.

The five-year note auction drew a high yield of 1.125 percent and a bid-to-cover ratio of 2.54, 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.

On the U.S. economic front, the National Association of Realtors released a report showing a substantial decrease in existing home sales in the month of July.

NAR said existing home sales slumped 3.2 percent to an annual rate of 5.39 million in July from 5.57 million in June. Economists had expected sales to dip by 0.9 percent to a rate of 5.52 million.

With the steep monthly decline, existing home sales are down by 1.6 percent compared to the same month a year ago, reflecting the first year-over-year drop since November of 2015.

Reports on durable goods orders and weekly jobless claims may attract attention on Thursday, but trading activity may be somewhat subdued as Yellen's speech looms.

Bond traders are likely to keep an eye on the results of the Treasury's auction of $28 billion worth of seven-year notes.