Treasuries moved notably higher over the course of the trading day on Wednesday as traders reacted to disappointing U.S. retail sales data.
Bond prices moved steadily higher for much of the session before closing firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled 7.4 basis points to 1.981 percent.
With the decrease on the day, the ten-year yield ended the session at its lowest closing level in well over five months.
The strength among treasuries came following the release of a report from the Commerce Department showing that retail sales rose less than expected in September.
The report said retail sales edged up by 0.1 percent in September, while economists had expected sales to rise by 0.2 percent.
Excluding auto sales, retail sales actually fell by 0.3 percent during the month compared to economist estimates for a 0.1 percent drop.
While the report reinforced expectations that the Federal Reserve will hold off on raising interest rates, the data also renewed concerns about the economic outlook.
A separate report from the Labor Department showed that a steep drop in energy prices contributed to a bigger than expected decrease in producer prices in September.
Treasuries saw further upside following the release of the Federal Reserve’s Beige Book toward the end of the trading day.
The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, said reports from the districts point to continued modest expansion in economic activity.
The Fed noted a number of districts cited the strong dollar as restraining manufacturing activity as well as tourism spending.
Economic data may remain in focus on Thursday, with traders likely to keep a close eye on reports on consumer prices, jobless claims, and regional manufacturing.
The material has been provided by InstaForex Company – www.instaforex.com