Following the uptick seen in the previous session, treasuries showed a more notable move to the upside during trading on Monday.
Bond prices moved higher in morning trading and saw continued strength in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid by 5.1 basis points to 1.040 percent.
The strength among treasuries came amid reports of intensifying Republican opposition to President Joe Biden’s proposed $1.9 trillion stimulus package.
A number of GOP Senators have expressed skepticism about the need for additional stimulus after recently approving a $900 billion relief package.
Republicans have expressed support for some elements of Biden’s proposal but have raised concerns about other initiatives as well as the price tag for the overall bill.
Treasuries saw some further upside following the release of the results of the Treasury Department’s auction of $60 billion worth of two-year notes, which attracted above average demand.
The two-year note auction drew a high yield of 0.125 percent and a bid-to-cover ratio of 2.67, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.57.
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 $61 billion worth of five-year notes on Tuesday.
Trading on Tuesday may also be impacted by reaction to the Conference Board’s report on consumer confidence in the month of January.
The material has been provided by InstaForex Company – www.instaforex.com