WASHINGTON (dpa-AFX) - After ending the previous session roughly flat, treasuries showed a notable move to the downside during trading on Tuesday.
Bond prices came under pressure over the course of the morning and remained firmly negative throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.0 basis points to 4.529 percent.
The weakness among treasuries came amid a sharp increase by the price of crude oil, with U.S. crude oil futures spiking by more than 5 percent.
Crude oil prices have surged in response to reports of projectile attacks against several vessels travelling through the Strait of Hormuz.
The reports raised concerns about a re-escalation of the conflict between the U.S. and Iran and a subsequent rebound by crude oil prices that would translate to higher inflation.
Treasuries saw continued weakness after the Treasury Department revealed this month's auction of $58 billion worth of three-year notes attracted modestly below average demand.
The three-year note auction drew a high yield of 4.179 percent and a bid-to-cover ratio of 2.60, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.66.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
On the U.S. economic front, a report released by the Commerce Department showed a substantial increase in the size of the U.S. trade deficit in the month of May.
The Commerce Department said the trade deficit widened to $77.6 billion in May from a revised $54.6 billion in April.
Economists had expected the trade deficit to surge to $78.7 billion from the $55.9 billion originally reported for the previous month.
The sharply wider trade deficit came as the value of imports shot up by 3.3 percent to $395.3 billion, while the value of exports plunged by 3.2 percent to $317.7 billion.
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