With traders digesting a mixed batch of U.S. economic data, treasuries showed a lack of direction over the course of the trading day on Wednesday.
Bond prices bounced back and forth across the unchanged line before ending the day modestly higher. 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 1.943 percent.
Treasuries moved modestly higher in early trading following the release of disappointing reports on industrial production and regional manufacturing activity.
The Federal Reserve released a report showing that production fell by 0.5 percent in April following a 0.3 percent increase in March, while economists had expected a more modest 0.2 percent drop.
A separate report from the New York Federal Reserve showed an unexpected contraction in regional manufacturing activity in May.
However, treasuries turned lower following the release of a better than expected report on homebuilder confidence.
The National Association of Home Builders said its housing market index climbed to 44 in May from a downwardly revised 41 in April. Economists had expected the index to rise to 43.
Jennifer Lee, senior economist at BMO Capital, said, "At the intersection of the U.S. economy, the housing market is still flashing a green light, while business production is flashing yellow."
Treasuries moved back to the upside going into the close, with the rebound coinciding with a pullback by stocks on Wall Street.
Economic data is likely to remain in focus on Thursday amid the release of reports on weekly jobless claims, housing starts, and Philadelphia-area manufacturing activity.
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