Treasuries Move Modestly Higher Following Recent Downward Move

(RTTNews) - Treasuries moved modestly higher during trading on Wednesday, regaining some ground after trending lower in recent sessions.

Bond prices moved moderately higher in morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.2 basis points to 2.64 percent.

With the slight pullback on the day, the ten-year yield gave back some ground after ending Tuesday's trading at its highest closing level in three weeks.

The modest strength among treasuries came on the heels of the notable downward move seen on the heels of last week's monetary policy announcement from the Federal Reserve.

Buying interest was somewhat subdued, however, as traders looked ahead of the release of some key economic data later this week.

Traders are likely to keep a close eye on the Commerce Department's report on third quarter GDP on Thursday and the Labor Department's October jobs report on Friday.

The reports could have a significant impact on the outlook for monetary policy even though the jobs report is likely to be distorted by the government shutdown.

With the focus on those more closely watched reports, traders largely shrugged off a report from the Conference Board showing that its leading economic indicators index rose in line with estimates in September.

The Conference Board said its leading economic index rose by 0.7 percent in September following a matching increase in August. The continued increase by the index also matched economist estimates.

Ken Goldstein, an economist at the Conference Board, said, "The September LEI suggests the economy was expanding modestly and possibly gaining momentum before the government shutdown."

"Beyond the immediate fallout of the shutdown, the biggest challenge is whether relatively weak consumer demand, pinned down by weak wage growth and low levels of confidence, will recover during the final stretch of 2013 and into 2014," he added.

Trading on Thursday is likely to be impacted by reaction to the third quarter GDP report. The Labor Department's weekly jobless claims report may also attract some attention.