After initially showing a lack of direction, treasuries moved notably higher over the course of the trading day on Wednesday.
Bond prices climbed firmly into positive territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dropped by 4.9 basis points to 2.35 percent.
The increase by treasuries was partly due to trepidation ahead of a Greek parliament vote on the conditional bailout agreement that includes several tough austerity measures.
Greek lawmakers are expected to approve the deal, although images of protesters clashing with police in Athens led some traders to look to the safe haven of bonds.
Traders were also digesting remarks by Federal Reserve Chair Janet Yellen, who testified before the House Financial Services Committee.
Yellen reiterated her belief that it would be appropriate to raise interest rates before year-end if the economy evolves as expected.
However, the Fed Chief also noted the timing of the first rate hike will be determined on a meeting-by-meeting basis.
Yellen also said labor market conditions have improved substantially but are not yet consistent with maximum employment.
Meanwhile, the Labor Department released a report early in the day showing that producer prices rose by slightly more than expected in the month of June.
The Labor Department said its producer price index rose by 0.4 percent in June following a 0.5 percent increase in May. Economists had expected prices to climb by 0.3 percent.
Excluding food and energy prices, core producer prices increased by 0.3 percent in June after edging up by 0.1 percent in the previous month. Core prices had been expected to show another 0.1 percent uptick.
The Federal Reserve also released a separate report showing a slightly bigger than expected increase in industrial production in June.
The report said industrial production increased by 0.3 percent in June after edging down by 0.2 percent in May. Economists had expected production to rise by 0.2 percent.
The outcome of the Greek vote is likely to attract some attention on Thursday along with U.S. reports on weekly jobless claims, homebuilder confidence and Philadelphia-area manufacturing activity.
Yellen is also scheduled to testify before the Senate Banking Committee, although her prepared remarks are likely to mirror those she delivered today.
The material has been provided by InstaForex Company – www.instaforex.com