Treasuries experienced a recovery on Tuesday after initially extending the previous day's slump early in the trading session. Bond prices rebounded significantly from their initial lows, ending the day virtually unchanged. As a result, the yield on the ten-year benchmark note, which inversely correlates with its price, decreased marginally by less than a basis point to 4.591 percent.
During early trading, the ten-year yield peaked at 4.629 percent, reaching its highest intraday level in nearly seven months. The rebound in treasury prices followed the U.S. Treasury Department's announcement of this month's auction results for $70 billion in five-year notes, which saw average demand.
The ten-year note auction resulted in a high yield of 4.478 percent and a bid-to-cover ratio of 2.40. In comparison, the last ten five-year note auctions had an average bid-to-cover ratio of 2.39. The bid-to-cover ratio is an indicator of demand, representing the number of bids made for each dollar's worth of securities available for sale.
Overall, trading activity remained relatively muted, as many traders chose to stay away from their desks due to the upcoming Christmas Day holiday on Wednesday.
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