Two-Year Note Auction Attracts Above Average Demand

Kicking off this week’s series of announcements of the results of its long-term securities auctions, the Treasury Department revealed Tuesday that this month’s auction of $42 billion worth of two-year notes attracted above average demand.

The two-year note auction drew a high yield of 4.373 percent and a bid-to-cover ratio of 2.71.

Last month, the Treasury also sold $42 billion worth of two-year notes, drawing a high yield of 4.505 percent and a bid-to-cover ratio of 2.64.

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 ten previous two-year note auctions had an average bid-to-cover ratio of 2.58.

The Treasury is due to announce the results of this month’s auctions of $43 billion worth of five-year notes and $35 billion worth of seven-year notes on Wednesday and Thursday, respectively.

Gold Futures Settle Higher As Dollar Eases After China Ends Travel Restrictions

Gold prices climbed higher on Tuesday as the dollar turned weak against most of its major counterparts.

China’s decision to end travel restrictions and quarantine for inbound travelers from January 8, symbolizing an end to its zero-Covid policy, lifted investor sentiment and pushed up stock prices and limited the dollar’s safe-haven appeal.

The dollar index, which dropped to 103.89 in the Asian session, climbed to 104.40 in the New York session, and was last seen at 104.12, down 0.19% from the previous close.

Gold futures for February ended higher by $18.90 at $1,823.10 an ounce, after climbing to a six-month high of $1,841.90 an ounce.

Silver futures for March ended up $0.297 at $24.217 an ounce, while Copper futures for March settled at $3.8405 per pound, gaining $0.0315.

Oil Futures Fail To Hold Early Gains, Settle Flat

Crude oil prices pared gains and settled roughly flat on Tuesday after refineries in the Gulf Coast restarted after a temporary closure.

Oil prices surged higher earlier in the session on fears over supply disruptions due to winter storm Elliott, and China’s decision to ease travel restrictions.

Oil prices were also supported by reports Russia might cut oil output early next year. Also, Russian President Vladimir Putin announced a ban on the sale of oil which would allow exports to countries imposing a price cap only in the case of a special exemption from the Kremlin.

West Texas Intermediate Crude oil futures for February settled flat at $79.53 a barrel, coming off the session’s high of $81.18 a barrel.

Brent crude futures settled at $84.33 a barrel, gaining $0.41 or about 0.5%.

According to media reports the relentless storm affected logistics and production of petroleum products and shale oil. About 1.5 million bpd of the Gulf Coast’s refining capacity was shut down due to the freezing temperatures as of Friday (December 23).

A report from RIA news agency citing Deputy Prime Minister Alexander Novak that Russia might cut oil output by 5-7% in early 2023 in response to price caps, pushed up oil prices.

Oregon Bans Sale Of Gas Powered Cars After 2035

A vote passed by policymakers in Oregon on Monday will make the sale of new gas-powered passenger vehicles a thing of the past by the year 2035.

The decision was made during a special meeting of the Oregon Environmental Quality Commission on Monday afternoon.

Referred to as the “Advanced Clean Cars II Rules,” the changes will not only stop new sales of gas-powered passenger cars but also update the Low Emission Vehicle Program rules to be identical to California’s current light-duty vehicle emission standards.

The new rules will allow for continued sales of hybrid vehicles, running primarily on electricity but also gas. The ban doesn’t apply to those gas cars, which are at present on the road or purchased before the ban goes into effect.

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Aurora Fire Rescue responding to trench collapse

Aurora Fire Rescue is responding to a reported trench collapse in the 17500 block of E. Eastman Dr., according to a 1:56 p.m. tweet from the department.

No additional information about potential injuries or circumstances around the collapse was available at this time.

This is a developing story that will be updated as more information becomes available.

Ten-Year Yield Jumps To Highest Closing Level In Over A Month

Treasuries moved sharply lower during trading on Tuesday, extending the downward trend seen over the past several sessions.

Bond prices came under pressure in early trading and saw further downside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 10.9 basis points to 3.860 percent.

With the substantial increase on the day, the ten-year yield ended the session at its highest closing level in well over a month.

The weakness among treasuries came following news that China plans to ease Covid travel restrictions in the coming weeks, reducing the safe have appeal of bonds.

China said it would drop quarantine requirements for international arrivals beginning January 8 in a major step towards reopening its borders and marking another shift from its so-called zero-Covid policy.

Trading activity was relatively subdued, however, as some traders remained away from their desks following the holiday.

A light economic calendar also kept traders on the sidelines, although reports on pending home sales, weekly jobless claims and Chicago-area business activity may attract attention later this week.