Treasuries are showing strength in early trading Monday, as investors move into the safety of government backed bonds amid likely profit taking on Wall Street following the gains posted in recent sessions.
The move into risk-averse investments also comes as there is no significant economic news on tap for the day, further leading traders to favor guaranteed returns.
The benchmark ten-year note continues to show strength early, moving further into positive territory. The yield on the note is down to 2.878 percent, a fall of 2.9 basis points on the day.
Later this morning, some investors will look to the Treasury Department's announcements regarding upcoming securities auctions aimed at funding the government's record spending measures.
Traders will focus on the government's details regarding the sale of the ten-year note, known as the benchmark security in the bond market.
The previous auction took place early last month, when the Treasury sold $18 billion worth of ten-year notes. The auction posted a high yield of 3.681 percent, while drawing modest demand, with the bid-to-cover ratio coming in at a level of 2.14.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
In relation to the standard ten-year note, traders will also pay attention to Tuesday's sale of $6.0 billion worth of 10-year inflation immune treasuries called TIPS.
The ten-year TIPS auction is closely watched, as the spread between the security and the regular ten-year note will give an indication of near-term inflation.
The Treasury Department is scheduled to reveal details of its upcoming sales at 11 a.m. ET, while holding standard sales for short-term securities at 1 p.m. ET.
In other news treasury news this morning, the New York Federal Reserve plans to continue its purchase of long-term bonds, set to buy treasuries maturing between the years of 2019 and 2026.
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