Treasuries Close Roughly Flat After Recovering From Early Pullback

(RTTNews) - After trending higher over the past few sessions, treasuries gave back ground in early trading on Wednesday before rebounding as the day progressed.

Bond prices climbed well off their early lows, eventually ending the day roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 3.998 percent after reaching a high of 4.042 percent.

With the slight decrease on the day, the ten-year yield closed below 4 percent for the first time since late October.

The early pullback by treasuries may have reflected profit taking following the recent upward trend, with the ten-year yield rebounding after closing lower for six out of the last seven sessions.

Selling pressure waned over the course of the session, however, as traders continue to express optimism about the outlook for interest rates following dovish comments from some Federal Reserve officials.

CME Group's FedWatch Tool indicates the chances the Fed will lower rates by another quarter point next month have soared to 82.9 percent from just 30.1 percent a week ago.

According to the FedWatch Tool, the chances of a rate cut are little changed from yesterday despite the release of some upbeat U.S. economic data.

The Commerce Department released a long-delayed reported this morning showing new orders for U.S. manufactured durable goods increased by more than expected in the month of September. The report said durable goods orders climbed by 0.5 percent in September after spiking by an upwardly revised 3.0 percent in August.

Economists had expected durable goods orders to rise by 0.3 percent compared to the 2.9 percent surge that had been reported for the previous month.

A separate report released by the Labor Department showed an unexpected dip by first-time claims for U.S. unemployment benefits in the week ended November 22nd.

The Labor Department said initial jobless claims slipped to 216,000, a decrease of 6,000 from the previous week's revised level of 222,000.

Economists had expected jobless claims to inch up to 225,000 from the 220,000 originally reported for the previous week.

With the unexpected dip, jobless claims fell to their lowest level since hitting a matching number in the week ended April 12th.

Following the Thanksgiving Day holiday on Thursday, trading activity may be somewhat subdued during trading on Friday amid a lack of major U.S. economic data.