Treasuries Regain Ground Following Yesterday’s Sell-Off

Following the sell-off seen in the previous session, treasuries showed a strong move back to the upside during trading on Wednesday.

Bond prices moved modestly higher in early trading and climbed more firmly into positive territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.5 basis points to 3.265 percent.

The notable decrease came after the ten-year yield surged 14.7 basis points to its highest closing level in nearly three months on Tuesday.

Bargain hunting likely contributed to the rebound by treasuries, although buying interest remained somewhat subdued amid lingering concerns about the outlook for interest rates.

Treasuries remained firmly positive following the release of the Federal Reserve’s Beige Book, which said economic activity in the U.S. has been essentially unchanged since early July.

The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, noted five districts reported slight to modest growth in activity and five others reported slight to modest softening.

With regard to inflation, the Fed said prices remained highly elevated, with substantial price increases reported across all districts, particularly for food, rent, utilities, and hospitality services.

However, the report noted nine districts reported some degree of moderation in rate of price growth in recent months.

Remarks by Fed Chair Jerome Powell are likely to attract attention on Thursday along with a report on weekly jobless claims.

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