Treasuries Close Roughly Flat After Seeing Early Strength

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After moving modestly higher early in the session, treasuries pulled back near the unchanged line over the course of the trading day on Tuesday.

Bond prices gave back ground after an early upward move before closing nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.157 percent.

The roughly flat close by treasuries came amid another relatively quiet day on the U.S. economic front, with traders shrugging off a Labor Department report showing the number of job openings was little changed at 6.6 million on the last business day of December.

Traders kept an eye on developments in Washington amid continued optimism about another coronavirus relief package.

House Democrats have unveiled a proposal providing $1,400 stimulus checks to individuals making up to $75,000 a year and couples who earn up to $150,000 a year.

Those income levels are unchanged from previous stimulus checks, although the proposal would phase out payments faster than previous bills and completely cut off individuals making more than $100,000 and couples making more than $200,000.

Meanwhile, the Treasury Department revealed that this month’s auction of $58 billion worth of three-year notes attracted roughly average demand.

The three-year note auction drew a high yield of 0.196 percent and a bid-to-cover ratio of 2.39, while the ten previous three-year note auctions had an average bid-to-cover ratio of 2.42.

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 auctions of $41 billion worth of ten-year notes on Wednesday.

Traders are also likely to keep an eye on a report on consumer price inflation as well as remarks by Federal Reserve Chair Jerome Powell.


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