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Treasuries Pull Back Off Best Levels But Still Close Higher

After moving notably higher early in the session, treasuries gave back ground but remained firmly positive during trading on Wednesday.

While bond prices pulled back off their best levels of the day, they still extended a recent upward trend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4 basis points to 2.379 percent.

The ten-year yield climbed off its intraday low of 2.361 percent but still ended the day at its lowest closing level in well over a month.

Treasuries initially benefited from economic concerns after a report from the Commerce Department showed an unexpected pullback in U.S. retail sales in the month of April.

The Commerce Department said retail sales edged down by 0.2 percent in April after spiking by an upwardly revised 1.7 percent in March.

Economists had expected retail sales to rise by 0.2 percent compared to the 1.6 percent jump originally reported for the previous month.

Excluding a steep drop in auto sales, retail sales inched up by 0.1 percent in April after surging up by 1.3 percent in March, although ex-auto sales had been expected to climb by 0.7 percent.

Economic worries were also generated in reaction to a Federal Reserve report showing an unexpected decrease in industrial production in April.

The Fed said industrial production fell by 0.5 percent in April following a revised 0.2 percent uptick in March. Economists had expected production to come in unchanged.

However, treasuries gave back some ground following reports President Donald Trump plans to delay imposing steep tariffs on auto imports.

Media reports indicated Trump plans to delay imposing the auto tariffs by up to six months in order to allow negotiations to continue.

Trump faces a May 18th deadline to decide whether to slap a tariff of as much as 25 percent on imported cars and parts due to national security concerns.

Looking ahead, trading on Thursday may be impacted by reaction to reports on weekly jobless claims, housing starts, and Philadelphia-area manufacturing activity.

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