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US Treasurys hold lower after 5-year notes sale; Fed eyed

U.S. sovereign bond prices edged lower Tuesday as investors digested U.S. economic data and awaited the Federal Reserve's interest rate decision due Wednesday.

Investors also digested a $34 billion auction in five-year notes, which came in at a high yield of 1.41 percent.

The Treasury Department auctioned at a high yield of 1.410 percent on Tuesday.

The bid-to-cover ratio, an indicator of demand, was 2.41, below a 10-auction average of 2.44.

Indirect bidders, which include major central banks, were awarded 63.4 percent, above a recent average of 58. Direct bidders, which include domestic money managers, bought 6.8 percent, slightly below a 10-auction average of 7 percent.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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The yield on the benchmark 10-year Treasury note, which moves inversely to its price, inched higher to 1.9353 percent, while the yield on the 30-year Treasury bond was lower at 2.7576 percent.

The benchmark 10-year yield also hit its highest level since March 23 earlier in the session.

Two-year yields were also slightly higher, last trading at 0.8562 percent, while five-year yields held at 1.3915 percent.

The Federal Reserve's Federal Open Market Committee (FOMC) will start its two-day meeting Tuesday, with market watchers anticipating an interest rate decision on Wednesday.

Durable goods data for March was the first out of the gates Tuesday morning, showing a 0.8 percent rise, well below expectations.

The S&P Case-Shiller home price index for February rose 5.4 percent, just below expectations for a 5.5 percent increase among analysts.

Meanwhile, April flash Markit services PMI came in at 52.1. Consumer confidence for April came in at 94.2, below the expected 96, while the Richmond Fed survey for April beat estimates with a reading of 14.