Treasuries Show Strong Move To The Upside On Economic Worries

Treasuries showed a strong move to the upside during trading on Wednesday, more than offsetting the pullback seen in the previous session.

Bond prices moved significantly higher early in the session and remained firmly positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid by 9.9 basis points to 1.581 percent.

With the substantial decrease on the day, the ten-year yield ended the session at its lowest closing level in nearly three years.

Treasuries benefited from the appeal as a safe haven as a disappointing batch of Chinese economic data raised concerns about the global economic outlook.

The data included reports from the National Bureau of Statistics showing Chinese industrial production and retail sales growth fell short of economist estimates in July.

The ten-year yield subsequently dipped below the two-year yield, which is widely seen as an indicator of a recession.

The inversion sparked a noteworthy sell-off on Wall Street, which further increased the appeal of safe havens such as bonds and gold.

Traders will be given a clearer picture of the strength of the U.S. economy with the release of an avalanche of economic data on Thursday.

Reports on weekly jobless claims, retail sales, and industrial production are likely to be in the spotlight, although data on regional manufacturing activity, labor productivity and costs, and homebuilder confidence may also attract attention.

The Labor Department released a report this morning showing import prices in the U.S. unexpectedly saw a modest increase in the month of July.

Import prices rose by 0.2 percent in July after plunging by a revised 1.1 percent in June, while economists had expected import prices to come in unchanged.

The report also showed an unexpected uptick in export prices, which crept up by 0.2 percent in July after falling by a revised 0.6 percent in June. Export prices had also been expected to come in unchanged.

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