On Wednesday, Treasury securities experienced a notable decline throughout the trading day, continuing the downward trend initiated in the prior session.
Bond prices saw a consistent descent during morning trading and maintained a resolute negative trend into the afternoon. As a result, the yield on the benchmark ten-year note, which moves inversely to its price, surged by 8.2 basis points to reach 4.624 percent.
This increase in the ten-year yield built on the 7.5 basis point rise recorded on Tuesday, culminating in the highest closing level in nearly a month.
Treasuries were pressured in the previous session due to the Treasury Department's report of underwhelming results from recent two-year and five-year note auctions. According to the Treasury, the $69 billion auction of two-year notes and the $70 billion auction of five-year notes both witnessed demand that fell well below the average.
Today, the negative sentiment persisted as the Treasury disclosed that the $44 billion auction of seven-year notes also attracted below-average demand.
The seven-year note auction garnered a high yield of 4.650 percent and a bid-to-cover ratio of 2.43, compared to the average bid-to-cover ratio of 2.55 from the past ten seven-year note auctions.
The bid-to-cover ratio, a measure of demand, indicates the number of bids received for each dollar of securities sold.
Additionally, ongoing concerns about the interest rate outlook continued to exert pressure on treasuries ahead of the release of inflation figures favored by the Federal Reserve, scheduled for Friday.
These inflation data are poised to have a significant impact on interest rate expectations ahead of the Fed's next monetary policy meeting on June 11-12.
Late in the trading day, the Federal Reserve released its Beige Book, which indicated U.S. economic activity continued to expand from early April to mid-May, though conditions varied across industries and districts.
The report also noted that prices increased modestly during the reporting period and are expected to maintain a modest growth rate in the near term.
Reports on weekly jobless claims, first-quarter GDP, and pending home sales are likely to draw attention on Thursday, although trading activity may remain restrained in anticipation of Friday's crucial inflation data.
