Treasuries Move To The Upside Going Into The Close

(RTTNews) - With traders keeping an eye on developments on the Brexit front, treasuries showed a notable move to the upside late in the trading day on Tuesday.

Bond prices pulled back near the unchanged after an initial advance but rebounded going into the close. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.4 basis points to 1.768 percent.

The late-day strength among treasuries came after U.K. lawmakers voted to move forward with legislation related to Britain's withdrawal from the European Union but then voted against a shortened time frame to review the bill.

Members of Parliament narrowly voted against the limited time frame, which would have provided just three days to evaluate the legislation.

The vote suggests lawmakers will not meet an October 31st deadline, setting the stage for another extension by the EU to avoid a no-deal Brexit.

On the U.S. economic front, the National Association of Realtors released a report showing existing home sales pulled back by much more than anticipated in the month of September.

NAR said existing home sales plunged by 2.2 percent to an annual rate of 5.38 million in September after jumping by 1.5 percent to an upwardly revised 5.50 million in August.

Economists had expected existing home sales to drop by 0.7 percent to a rate of 5.45 million from the 5.49 million originally reported for the previous month.

Meanwhile, traders largely shrugged off the results of the Treasury Department's auction of $40 billion worth of two-year notes, which attracted above average demand.

The two-year note auction drew a high yield of 1.594 percent and a bid-to-cover ratio of 2.70, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.56.

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

Looking ahead, the Treasury is due to announce the results of its auction of $41 billion worth of five-year notes on Wednesday.