2023.03.2819:10:00UTC+00Treasuries Extend Yesterday's Sharp Pullback

Following the sharp pullback seen over the course of the previous session, treasuries saw further downside during trading on Tuesday.

Bond prices fluctuated as the day progressed but largely maintained a negative bias. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.6 basis points to 3.564 percent.

The ten-year yield added to the 14.8 basis point spike seen on Monday, climbing further off last Friday's six-month closing low.

The extended decline by treasuries came as concerns about banking sector turmoil continued to ease, further reducing the appeal of the relative safety of bonds.

A report from the Conference Board released unexpectedly showing a slight improvement in U.S. consumer confidence in the month of March may also have weighed on treasuries.

The Conference Board said its consumer confidence index inched up to 104.2 in March from an upwardly revised 103.4 in February.

The modest increase surprised economists, who had expected the consumer confidence index to slip to 101.0 from the 102.9 originally reported for the previous month.

Bond prices regained some ground following the release of the results of the Treasury Department's five-year note auction but moved back to the downside going into the close.

The Treasury revealed this month's auction of $43 billion worth of five-year notes five-year note auction drew a high yield of 3.665 percent and a bid-to-cover ratio of 2.48, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.42.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

A report on pending home sales may attract some attention on Wednesday, although trading activity may remain somewhat subdued ahead of the release of more closely watched data later in the week.