After initially showing a lack of direction, treasuries moved moderately higher over the course of the trading session on Wednesday.

Bond prices climbed firmly into positive territory in afternoon trading but gave back some ground going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 0.680 percent.

Treasuries moved to the upside as the Treasury Department revealed the results of its first twenty-year bond auction since 1986.

The Treasury sold $20 billion worth of twenty-year bonds, drawing a high yield of 1.220 percent and a bid-to-cover ratio of 2.53.

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

The reintroduction of the twenty-year bond comes as the government seeks to the extend the time it has to pay off its record debt as deficits skyrocket due in part to the coronavirus crisis.

Treasury Secretary Steven Mnuchin said during congressional testimony on Tuesday that he intends to expand government financing with more ten, twenty and thirty-year bonds.

“What I’d like to do is lock in a significant amount of very low interest rates so that the money we are borrowing can be paid back and dealt with over a long period of time,” Mnuchin said.

Meanwhile, the minutes of the Federal Reserve’s latest monetary policy meeting highlighted concerns about the extraordinary amount of uncertainty and considerable risks to economic activity created by the coronavirus pandemic.

The minutes said participants at the late-April meeting discussed several alternative scenarios with regard to the behavior of economic activity in the medium term that all seemed about equally likely.

“These scenarios differed in the assumed length of the pandemic and the consequent economic disruptions,” the Fed said.

A number of participants believed there was a substantial likelihood of additional waves of the coronavirus outbreak, which could lead to further economic disruptions.

The Labor Department’s weekly jobless claims report is likely to attract attention on Thursday, potentially overshadowing reports on Philadelphia-area manufacturing activity, existing home sales, and leading economic indicators.

The material has been provided by InstaForex Company – www.instaforex.com