Treasury notes declined on Tuesday as traders made the move to riskier assets from bonds, following the path of least resistance on the day by moving note values lower and yields higher. The markets ignored the question of why 0.9% was enough interest to earn to hold notes, especially if equities were able to move higher on a day that the Federal Reserve stepped in to purchase another $7b of notes available, 26% of today’s auction, a figure that was a lot lower than last week’s 34% purchase.
The Federal Reserve sold a record number of new-issue notes last week, and created another mass of dollar backed Treasuries for the market to absorb at auction today. The Fed continued it short-dollar mandate by buying over $15b of U.S. debt in two weeks, in its tenth buy-back operation since March 25th. The 10 year Treasury yield increased 6 basis points on the day, to trade at 2.9%.
Crude oil for April delivery held major support at $48.50, and finished higher by 0.1% on the day, with a $0.04 gain. Futures had dropped as low as $46.50 before the equity market rally sent speculative interest in oil higher.
Gold for April delivery was recently trading flat at $885 per ounce. Bullion held in the SPDR Gold ETF remained unchanged at a record 1,127.68 metric tons, for a third day.