After moving higher for three consecutive sessions, treasuries gave back some ground during the trading day on Wednesday.
Bond prices regained some ground after an early move to the downside but still closed modestly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.4 basis points to 1.570 percent.
The modest pullback by treasuries came amid easing concerns about the coronavirus outbreak after Chinese officials reported the lowest number of newly confirmed cases since late January.
China’s National Health Commission reported 1,749 new cases of the coronavirus, bringing the nationwide total to 74,185. More than 2,000 people have died as a result of the outbreak.
Traders were also digesting a Labor Department report showing producer prices increased by much more than anticipated in the month of January.
The Labor Department said it producer price index for final demand climbed by 0.5 percent in January after rising by 0.2 percent in December. Economists had expected producer prices to inch up by 0.1 percent.
Excluding a pullback in energy prices and a modest increase in food prices, core producer prices still rose by 0.5 percent in January compared to economist estimates for a 0.2 percent uptick.
A separate report released by the Commerce Department showed a pullback in new residential construction in the month of January.
The Commerce Department said housing starts slumped by 3.6 percent to an annual rate of 1.567 million in January after soaring by 17.7 percent to a revised rate of 1.626 million in December.
Economists had expected housing starts to tumble by 11.4 percent to a rate of 1.425 million from the 1.608 million originally reported for the previous month.
Meanwhile, the report said building permits spiked by 9.2 percent to an annual rate of 1.551 million in January after sliding by 3.7 percent to a revised rate of 1.420 million in December.
Building permits, an indicator of future housing demand, had been expected to rise by 2.4 percent to a rate of 1.450 million from the 1.416 million originally reported for the previous month.
Toward the end of the trading day, the Federal Reserve released the minutes of its latest monetary policy meeting, which reiterated Fed officials believe leaving interest rates at their current levels is likely to remain appropriate for some time.
The minutes of the January meeting made several references to the coronavirus outbreak but are likely to reinforce expectations that the Fed will remain on hold at upcoming meetings.
News on the coronavirus front is likely to remain in focus on Thursday, although traders are also likely to keep an eye on reports on weekly jobless claims, leading economic indicators, and Philadelphia-area manufacturing activity.
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