Treasuries moved significantly higher over the course of the trading day on Wednesday, extending the upward trend seen over the past few sessions.

Bond prices showed a steady move to the upside as the day progressed, closing firmly in positive territory. Subsequently, the yield on the benchmark ten-year note, slumped 9 basis points to 1.529 percent.

The ten-year yield closed lower for the fourth straight session, pulling back further off the five-month closing high set last Thursday.

The continued strength among treasuries came after the Bank of Canada announced that it is ending quantitative easing.

Citing the progress made in the economic recovery, the Bank of Canada said it has decided to end quantitative easing and keep its overall holdings of Government of Canada bonds roughly constant.

The Bank of Canada follows several other central banks around the world that recently begun scaling back pandemic-era stimulus.

Following its monetary policy meeting next week, the Federal Reserve could announce plans to begin tapering its asset purchases.

Treasuries saw further upside after the Treasury Department revealed this month’s auction of $61 billion worth of five-year notes also attracted above average demand.

The five-year note auction drew a high yield of 1.157 percent and a bid-to-cover ratio of 2.55, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.36.

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

Meanwhile, bond traders largely shrugged off a Commerce Department report showing durable goods orders pulled back by much less than expected in the month of September.

The Commerce Department said durable goods orders fell by 0.4 percent in September after jumping by a downwardly revised 1.3 percent in August.

Economists had expected durable goods orders to slump by 1.1 percent compared to the 1.8 percent spike that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders climbed by 0.4 percent in September after rising by 0.3 percent in August. The increase matched economist estimates.

A preliminary reading on third quarter GDP may attract attention on Thursday along with reports on weekly jobless claims and pending home sales.

Bond traders are also likely to keep an eye on the results of the Treasury’s auction of $62 billion worth of seven-year notes.


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