Treasuries experienced a recovery from initial losses to conclude Tuesday's session on a slightly positive note, with a similar trend observed in Thursday's trading. In the morning, bond prices were in decline but experienced a significant recovery in the afternoon. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, decreased by 1.2 basis points to settle at 4.579 percent after reaching a peak of 4.641 percent earlier.
The reversal in treasuries followed the Treasury Department's announcement of results from its long-term securities auctions. Tuesday's uptick was spurred by the release of the five-year note auction outcomes, while today's recovery was linked to the Treasury's report on the $44 billion auction of seven-year notes, which saw higher than average demand.
The seven-year note auction produced a high yield of 4.532 percent with a bid-to-cover ratio of 2.76, surpassing the average ratio of 2.59 over the last ten similar auctions. The bid-to-cover ratio serves as a demand indicator, illustrating the quantity of bids per dollar of securities available for sale.
The rebound in treasuries may also have been influenced by bargain hunting as the ten-year yield approached its highest intraday level in nearly seven months. Yet, trading activity remained muted, attributed to many traders being absent due to the Christmas Day holiday on Wednesday.
Light trading is expected to continue into Friday, as the absence of significant U.S. economic data will likely keep many traders from engaging in the market.