Treasuries Extend Recent Downtrend With Modestly Lower Close

(RTTNews) - Treasuries moved modestly lower during trading on Wednesday, extending the recent pullback off last week's highs.

Bond prices moved to the downside in early trading and remained stuck in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its prices, rose by 2.1 basis points to 2.229 percent.

With the increase on the day, the ten-year yield closed higher for the fourth time in five sessions, climbing further off last Wednesday's one-year closing low.

The continued pullback by treasuries was partly attributed to easing deflation concerns following the release of a report from the Labor Department showing an unexpected uptick in consumer prices in the month of September.

The Labor Department said its consumer price index edged up by 0.1 percent in September following a 0.2 percent drop in August. The modest increase came as a surprise to economists, who had expected prices to come in unchanged.

The unexpected increase in consumer prices reflected higher prices for food and shelter, which offset a continued decline in energy prices.

Excluding food and energy prices, the core consumer price index inched up by 0.1 percent in September after coming in unchanged in the previous month. The increase matched economist estimates.

The report said the consumer price index and the core consumer price index were up both up by 1.7 percent year-over-year in September, unchanged from the previous month.

Treasuries may also have benefited from their appeal as a safe haven amid news that a Canadian soldier was killed in a shooting at the Canadian Parliament complex in Ottawa.

Thursday's trading may be impacted by the release of the weekly jobless claims report as well as a report on leading economic indicators.