Treasuries moved to the downside in morning trading on Tuesday but recovered over the course of the afternoon to end the day roughly flat.
Bond prices bounced well off their morning lows and ended the day near the unchanged line for the second straight day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.805 percent.
The early weakness among treasuries was partly due to optimism about the financial situation in Europe amid reports that the European Central Bank is considering buying bonds from troubled eurozone countries such as Italy and Spain in order to reduce borrowing costs.
Optimism about potential progress on addressing the Greek debt crisis also helped to drag bond prices lower, with Eurogroup chief Jean-Claude Juncker due to meet with Greek Prime Minister Antonis Samaras in Athens on Wednesday.
Nonetheless, selling pressure waned over the course the morning and treasuries moved back to the upside amid a pullback by stocks on Wall Street.
Buying interest remained relatively subdued, however, as many traders remained on the sidelines amid a lack of major U.S. economic data.
Following two light day on the U.S. economic front, trading on Wednesday could be impacted by a report on existing home sales as well as the release of the minutes of the Federal Reserve's latest monetary policy meeting.
by RTT Staff Writer
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