WASHINGTON (dpa-AFX) - Following the modest rebound seen in the previous session, treasuries moved back to the downside during trading on Tuesday.
Bond prices came under pressure early in the session and remained in negative territory throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 2.054 percent.
With the increase on the day, the ten-year yield climbed further off the well over two-year closing low set last Wednesday.
The pullback by treasuries came as traders looked ahead to highly anticipated Congressional testimony from Federal Reserve Chairman Jerome Powell.
Powell is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.
The Fed chief is not likely to specifically lay out the central bank's plans to lawmakers, but traders are likely to closely analyze his comments for clues about the outlook for interest rates.
Wednesday will also see the release of the minutes of the Fed's last monetary policy meeting, which may shed additional light on the central bank's decision to make notable changes to its accompanying statement.
Treasuries remained in the red following the release of the results of the Treasury Department's auction of $38 billion worth of three-year notes, which attracted below average demand.
The three-year note auction drew a high yield of 1.857 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 2.54.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Powell's testimony and the minutes of the Fed's June meeting are likely to be in focus on Wednesday, as traders attempt to gauge the likelihood of an interest rate cut at the next central bank meeting later this month.
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