Treasuries moved notably higher over the course of the trading day on Wednesday after ending the two previous sessions nearly flat.
Bond prices showed a strong upward move in early trading and saw further upside following the release of the minutes of the latest Federal Reserve meeting. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 8.6 basis points to 1.719 percent.
The early strength among treasuries was partly due to the release of some troubling economic news from overseas, with a report from Japan showing that the country swung to a trade deficit in July.
The report from the Japanese Finance Ministry showed a trade deficit of 517.4 billion yen in July compared to a trade surplus of 60.3 billion yen in June. Japanese exports fell 8.1 percent year-over-year, while imports rose 2.1 percent.
Weakness among stocks also contributed to the appeal of treasuries, with a negative reaction to quarterly results from PC giant Dell (DELL) weighing on Wall Street.
Treasuries saw further upside following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which suggested that the central bank is losing patience with the pace of the fragile U.S. economic recovery
Many members of the Federal Reserve said additional monetary policy accommodation is likely warranted unless the economy improves substantial, potentially opening the door for another round of quantitative easing measures at the next meeting in September.
Meanwhile, bond traders largely shrugged off the release of a report from the National Association of Realtors showing a notable increase in existing home sales in the month of July.
NAR said existing home sales rose 2.3 percent to an annual rate of 4.47 million in July from 4.37 million in June. Economists had been expecting existing home sales to climb to an annual rate of 4.50 million.
Nonetheless, key U.S. economic data may attract some attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims and new home sales.
The Treasury Department is also scheduled to announce the details of next week's auctions of two-year, five-year, and seven-year notes.
by RTT Staff Writer
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