WASHINGTON (dpa-AFX) - After coming under pressure early in the session, treasuries showed a notable rebound over the course of the trading day on Tuesday.
Bond prices climbed well off their early lows, eventually ending the day modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.0 basis points to 4.289 percent after reaching a high of 4.366 percent.
The ten-year yield added to the notable drop seen on Monday, pulling back further off the nearly four-month closing high set last Friday.
Treasuries initially moved to the downside amid optimism the U.S. economy will continue to perform well regardless of the results of today's elections.
Polls show an extremely tight race between Vice President Kamala Harris and former President Donald Trump, suggesting the outcome of the presidential election may not be known by the end of the night.
Adding to the positive sentiment about the economy, a report from the Institute for Supply Management showed service sector activity unexpectedly grew at an accelerated rate in the month of October.
The ISM said its services PMI rose to 56.0 in October from 54.9 in September, with a reading above 50 indicating growth. The uptick surprised economists, who had expected the index to dip to 53.8.
With the unexpected increase, the ISM's services PMI reached its highest level since hitting 56.4 in July 2022.
The subsequent rebound by treasuries came after the Treasury Department revealed this month's auction of $42 billion worth of ten-year notes attracted above average demand.
The ten-year note auction drew a high yield of 4.347 percent and a bid-to-cover ratio of 2.58, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.51.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Amid a quiet day on the U.S. economic front, trading on Wednesday is likely to driven by whether or not a winner is officially called in the presidential election.
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