Treasuries Close Little Changed After Recovering From Early Weakness

After moving to the downside early in the session, treasuries regained ground over the course of the trading day on Tuesday.

Bond prices climbed well off their early lows, ending the day little changed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.2 basis points to 3.206 percent after reaching a high of 3.253 percent.

The recovery by treasuries came as stocks on Wall Street showed a substantial downturn after failing to sustain an early move to the upside.

Stocks initially benefited from news China has cut quarantine times for international travelers in a big step toward easing Covid-19 controls but buying interest waned shortly after the start of trading amid lingering concerns about a potential recession.

In U.S. economic news, the Conference Board released a report showing U.S. consumer confidence deteriorated to its lowest level in over a year in June.

The Conference Board said its consumer confidence index slid to 98.7 in June from a downwardly revised 103.2 in May. Economists had expected the index to drop to 101.0 from the 106.4 originally reported for the previous month.

With the continued decrease, the consumer confidence index fell to its lowest level since hitting 95.2 in February of 2021.

Meanwhile, the Treasury Department revealed this month’s auction of $40 billion worth of seven-year notes attracted above average demand.

The seven-year note auction drew a high yield of 3.280 percent and a bid-to-cover ratio of 2.48, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.37.

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 Monday, the Treasury revealed this month’s auctions of $46 billion worth of two-year notes and $47 billion worth of five-year notes attracted below average demand.

Remarks by Federal Reserve Chair Jerome Powell are likely to attract attention on Wednesday along with the Commerce Department’s final reading on first quarter GDP.

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