After ending the previous session modestly lower, treasuries showed a significant move back to the upside during trading on Tuesday.
Bond prices moved modestly higher early in the session and saw further upside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.7 basis points to 2.786 percent.
With the notable decrease on the day, the ten-year yield dropped to its lowest closing level in well over a month.
Treasuries may have benefited from their appeal as a safe haven, as stocks once again came under pressure following the rebound seen on Monday.
On the U.S. economic front, the Conference Board released a report showing an unexpected deterioration in consumer confidence in the month of March.
The Conference Board said its consumer confidence index dipped to 127.7 in March from a downwardly revised 130.0 in February.
The drop surprised economists, who had expected the index to inch up to 131.0 from the 130.8 originally reported for the previous month.
“Consumer confidence declined moderately in March after reaching an 18-year high in February,” said Lynn Franco, Director of Economic Indicators at the Conference Board.
She added, “Despite the modest retreat in confidence, index levels remain historically high and suggest further strong growth in the months ahead.”
Meanwhile, the Treasury Department continued this week’s series of long-term securities auctions with the sale of $35 billion worth of five-year notes, attracting average demand.
The five-year note auction drew a high yield of 2.612 percent and a bid-to-cover ratio of 2.50, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.49.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Trading on Wednesday may be impacted by revised fourth quarter GDP data as well as a report on pending home sales.
Bond traders are also likely to keep an eye on the results of the Treasury Department’s auction of $29 billion worth of seven-year notes.