Treasuries Turn Lower Once Again Amid Ongoing Interest Rate Worries

Mirroring the performance in the previous session, treasuries saw early strength on Wednesday but pulled back sharply over the course of the session.

Bond prices showed a substantial downturn as the day progressed, slumping firmly into negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 6.8 basis points at 4.626 percent after hitting a low of 4.491 percent.

The ten-year yield added to the uptick seen on Tuesday, once again reaching its highest closing level since October 2007.

Bargain hunting contributed to the early strength in the bond market, but buying interest waned shortly after the start of trading, as concerns about the outlook for interest rates continue to hang over the markets.

Recent comments from the likes of JPMorgan Chase (JPM) CEO Jamie Dimon and Minneapolis Federal Reserve President Neel Kashkari have led to worries the Federal Reserve may raise rates higher than previously anticipated.

Possibly adding to the interest rate concerns, the Commerce Department released a report unexpectedly showing a modest rebound in new orders for U.S. manufactured durable goods in the month of August.

The Commerce Department said durable goods orders crept up by 0.2 percent in August after plunging by a revised 5.6 percent in July.

The uptick surprised economists, who had expected durable goods orders to fall by 0.5 percent compared to the 5.2 percent nosedive that had been reported for the previous month.

Excluding a modest decrease in orders for transportation equipment, durable goods orders rose by 0.4 percent in August after inching up by a downwardly revised 0.1 percent in July.

Economists had expected ex-transportation orders to edge up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month.

“Signs of economic resilience will move the needle in possibly making the Fed deliver more rate hikes,” said Edward Moya, senior market analyst at OANDA.

While reports on weekly jobless claims and pending home sales may attract attention on Thursday, traders may be reluctant to make significant moves ahead of remarks by Fed Chair Jerome Powell due after the close of trading.

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