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Treasuries Close Flat After Recovering From Early Weakness

After showing an early move to the downside, treasuries recovered over the course of the trading session on Tuesday.

Bond prices climbed well off their worst levels of the day before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day unchanged at 2.722 percent after reaching a high of 2.750 percent.

The early weakness among treasuries was partly due to the release of some upbeat economic data, which reduced the appeal of safe havens like bonds.

The Institute for Supply Management released a report showing the pace of growth in service sector activity rebounded more than expected in February.

The ISM said its non-manufacturing index climbed to 59.7 in February after falling to 56.7 in January, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 57.3.

"The non-manufacturing sector's growth rate rebounded in February after cooling off in January," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

He added, "Respondents are concerned about the uncertainty of tariffs, capacity constraints and employment resources; however, they remain mostly optimistic about overall business conditions and the economy."

A separate report from the Commerce Department showed an unexpected increase in new home sales in the month of December.

Selling pressure waned over the course of the session, however, as lingering uncertainty about U.S.-China trade talks made traders reluctant to make more significant moves.

The impending release of the Labor Department's closely watched monthly jobs report on Friday also kept some traders on the sidelines.

Reports on private sector employment and the U.S. trade deficit may attract attention on Wednesday along with the Federal Reserve's Beige Book.

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