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Treasuries Close Roughly Flat After Recovering From Initial Weakness

After coming under pressure early in the session, treasuries regained ground over the course of morning trading on Wednesday.

Bond prices spent the afternoon lingering near the unchanged line before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.459 percent.

Treasuries initially moved to the downside in reaction to developments overseas, including news that Hong Kong leader Carrie Lam has withdrawn a controversial extradition bill.

The bill, which would have allowed people in Hong Kong to be extradited to mainland China, sparked widespread protests across Hong Kong.

A report showing growth in China's service sector accelerated in August despite broader economic headwinds also reduced the appeal of safe havens such as bonds.

Selling pressure waned shortly after the start of trading, however, as traders expressed continued uncertainty about the U.S.-China trade war and the global economic outlook.

Meanwhile, treasuries showed little reaction to the Federal Reserve's Beige Book, which said the U.S. economy expanded at a modest pace through the end of August.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, will be used by Fed officials to make their decision on interest rates at a two-meeting on September 17th and 18th.

The report noted continued concerns regarding tariffs and trade policy uncertainty but said the majority of businesses remain optimistic about the near-term outlook.

Reports on private sector employment, weekly jobless claims and service sector activity may attract attention on Thursday, although trading activity may be subdued ahead of the release of the Labor Department's more closely watched monthly jobs report on Friday.

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