Treasuries Close Slightly Lower Following Choppy Trading Session

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

Bond prices move to the downside going into the close to finish the session in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.1 basis points to 1.870 percent.

The slightly lower close by treasuries came amid continued strength on Wall Street, where stocks added to the substantial gains posted on Tuesday.

Stocks benefited from news of a "major breakthrough" in talks between Eurozone finance ministers and Greece to unlock 10.3 billion euros in new bailout loans.

A compromise has also reportedly been reached on further debt relief that should allow the International Monetary Fund to participate in the third rescue program.

"With the fresh funds, Greece's financing requirements would be covered up to the end of the year," said Commerzbank Analyst Christoph Weil.

He added, "After a completion of the first review, the ECB should accept Greek government bonds as collateral again"

An increase by the price of crude oil may also have weighed on treasuries, with crude for July delivery jumping $0.94 to $49.56 a barrel.

The price increase came after a report from the Energy Information Administration said crude oil stockpiles slumped by 4.2 million barrels last week.

Meanwhile, 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 1.395 percent and a bid-to-cover ratio of 2.60, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.44.

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

The Treasury is due to finish off this week's series of long-term securities auctions with the sale of $28 billion worth of seven-year notes on Thursday.

A batch of U.S. economic data may also attract attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims, durable goods orders, and pending home sales.