After ending the previous session little changed, treasuries moved sharply lower over the course of the trading day on Wednesday.<\/p>\n
Bond prices came under pressure in early trading and saw further downside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, surged 11.3 basis points to 4.593 percent.<\/p>\n
The sell-off by treasuries came as traders looked ahead to the release of key economic data in the coming days, including a preliminary reading on third quarter GDP due to be released on Thursday.<\/p>\n
Economists expect the pace of GDP to show a significant acceleration to 4.2 percent in the third quarter from 2.1 percent in the second quarter.<\/p>\n
Reports on weekly jobless claims, durable goods orders and pending home sales may also attract attention on Thursday, as traders look for additional clues about the outlook for interest rates.<\/p>\n
On Friday, the Commerce Department is due to release a report on personal income and spending that includes readings on inflation said to be preferred by the Federal Reserve<\/p>\n
Treasuries saw further downside after the Commerce Department released a report showing a substantial rebound in new home sales in the month of September.<\/p>\n
The Commerce Department said new home sales soared by 12.3 percent to an annual rate of 759,000 in September after plunging by 8.2 percent to a revised rate of 676,000 in August.<\/p>\n
Economists had expected new home sales to climb by 0.7 percent to an annual rate of 680,000 from the 675,000 originally reported for the previous month.<\/p>\n
With the much bigger than expected increase, new home sales reached their highest annual rate since hitting 773,000 in February 2022.<\/p>\n
The weakness persisted as the Treasury Department revealed this month’s auction of $52 billion worth of five-year notes attracted below average demand.<\/p>\n
The five-year note auction drew a high yield of 4.899 percent and a bid-to-cover ratio of 2.36, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.54.<\/p>\n
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold. <\/p>\n