Treasuries Finish Choppy Trading Day Modestly Higher

(RTTNews) - Treasuries fluctuated over the course of the trading session on Wednesday before eventually ending the day modestly higher.

Bond prices gave back ground after an early advance but moved back to the upside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.0 basis points to 3.953 percent.

The ten-year yield closed lower for the fourth time in the past five sessions, falling to its lowest closing level in over a year.

Treasuries benefitted from their appeal as a safe haven amid renewed uncertainty about trade relations between the U.S. and China following the latest remarks from President Donald Trump.

During a lunch with Republican lawmakers in the White House Rose Garden on Tuesday, Trump said he expects to be able to reach a "good deal" with Chinese President Xi Jinping but also suggested a meeting between the two leaders may not happen.

The afternoon rebound by treasuries came after a report from Reuters indicated the Trump administration is considering a plan to curb an array of software-powered exports to China.

Reuters said the plan is not the only option on the table but noted it would make good on Trump's threat to bar "critical software" exports to China in retaliation for Beijing's latest round of rare earth export restrictions

The higher close by treasuries also came after the Treasury Department revealed this month's auction of $13 billion worth of twenty-year bonds attracted above average demand.

The twenty-year bond auction drew a high yield of 4.506 percent and a bid-to-cover ratio of 2.73, while the ten previous twenty-year bond auctions had an average bid-to-cover ratio of 2.63.

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

With the ongoing government shutdown delaying many key U.S. economic reports, trading on Thursday may be impacted by reaction to the National Association of Realtors' report on existing home sales.