Treasuries Close Nearly Unchanged After Pulling Back Off Early Highs

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After moving notably higher early in the session, treasuries gave back ground and spent much of the session lingering near the unchanged line.

Bonds prices ended the day roughly flat following the early volatility. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.732 percent.

Treasuries initially benefited from bargain hunting following the spike seen in the previous session, but buying interest waned shortly after the open.

The subsequent pullback came after the Federal Reserve said a temporary change to the supplementary leverage ratio, or SLR, for depository institutions will expire as scheduled on March 31, 2021.

The temporary change, which allowed banks to hold less capital against Treasuries and other holdings, was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 pandemic.

Trading activity remained relatively light for the remainder of the session, with a lack of major U.S. economic data keeping some traders on the sidelines.

Reports on new and existing home sales, durable goods orders, and personal income and spending may attract attention next week along with Congressional testimony by Federal Reserve Chair Jerome Powell.

Bond traders are also likely to keep an eye on the results of the Treasury Department’s auctions of two-year, five-year and seven-year notes.

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