WASHINGTON (dpa-AFX) - After recovering from an early slump to end the previous session roughly flat, treasuries showed a significant move back to the downside during trading on Wednesday.
Bond prices came under pressure early in the session and slid more firmly into negative territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 11.5 basis points to 4.596 percent.
With the sharp increase on the day, the ten-year yield reached its highest closing level in over three months.
Treasuries initially moved lower amid U.S. fiscal uncertainty as President Donald Trump's sweeping tax bill inches through Congress.
Trump's sweeping tax and spending bill is one step closer to a full vote in the House of Representatives, with economists warning the proposal would add more than $2.5 trillion to the federal debt-currently at an all-time high of $36.8 trillion-over the next decade.
Further selling pressure was added to the bond market after the Treasury Department revealed this month's auction of $16 billion worth of twenty-year bonds attracted below average demand.
The twenty-year bond auction drew a high yield of 5.047 percent and a bid-to-cover ratio of 2.46, while the ten previous twenty-year bond auctions had an average bid-to-cover ratio of 2.58.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Following a few relatively quiet days on the U.S. economic front, trading on Thursday may be impacted by reaction to reports on weekly jobless claims and existing home sales.
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