FX.co ★ Treasuries See Further Upside Ahead Of Key Economic Data

Following a moderate rise in the previous trading session, Treasury bonds experienced further growth on Wednesday. Bond prices saw an increase during the morning trading and remained consistently high throughout the afternoon. Consequently, the interest rate on the ten-year benchmark note, which inversely correlates to its price, dropped by 3.8 basis points to 4.196 percent.

Treasury bonds continued to profit from positive sentiment about interest rate trends following the Federal Reserve's recent monetary policy pronouncement. Although the Federal Reserve did not change the interest rates as widely anticipated, officials still projected three rate cuts this year. Post this announcement, there has been a resurgence in the probability of a 25 basis point rate cut in June to 63.5 percent according to CME Group's FedWatch Tool.

The bond market remained strongly optimistic as this month's auction of $43 billion worth of seven-year Treasury bonds saw a slightly higher than average demand. The auction of these seven-year notes drew a high yield of 4.185 percent with a bid-to-cover ratio of 2.61, slightly higher than the average 2.55 ratio from the previous ten seven-year note auctions. The bid-to-cover ratio displays the degree of demand by indicating the number of bids for each dollar's worth of securities on sale.

Trading on Thursday might be influenced by responses to reports on weekly unemployment claims, Chicago's business activity, and pending home sales figures. A report detailing personal income and spending that comprises inflation indexes, which the Federal Reserve purportedly prefers, is also slated for release when markets are closed on Good Friday. Federal Reserve Chair Jerome Powell will also feature in a moderated discussion at the Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference during the holiday.