Treasuries Close Modestly Higher Following Fed Minutes

(RTTNews) - Treasuries showed a lack of direction throughout much of the trading day on Wednesday before eventually ending the session modestly higher.

Bond prices managed to end the day in positive territory but off their highs for the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.1 basis points to 2.251 percent.

The choppy trading seen for much of the session came as traders waited on the release of the minutes of the latest Federal Reserve meeting.

However, traders still did not show much conviction following the release of the Fed minutes, which seemed to reaffirm that the central bank will not raise interest rates in June.

The minutes of the April meeting said many participants thought it unlikely that the economic data available in June would provide sufficient confirmation that the conditions for raising rates had been satisfied.

The participants still did not rule out the possibility of a June rate hike, but only a few expect the conditions for rate hike to be met by then.

"At this stage, that is not much of a surprise," said Paul Ashworth, Chief U.S. Economist at Capital Economics. "Most economists already expect the Fed to wait until September."

He added, "The rebound in April payrolls wasn't strong enough to put June back on the table and the weakness in April's retail sales and manufacturing output figures probably made July an unlikely prospect too."

While traders will continue to digest the minutes overnight, trading on Thursday is likely to be driven by reaction to reports on weekly jobless claims, existing home sales, and Philadelphia manufacturing activity.