Treasuries Rally Amid Expectations Of European Stimulus

(RTTNews) - Treasuries moved sharply higher over the course of the trading day on Wednesday, extending the upward move seen in the previous session.

Bond prices showed a strong move to the upside in morning trading and remained firmly positive throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 7.5 basis points to 2.543 percent.

With the steep drop on the day, the ten-year yield ended the session at its lowest closing level in well over six months.

The strength among treasuries was largely attributed to expectations of further stimulus from the European Central Bank at its June meeting.

In an interview with German newspaper Die Zeit, ECB Executive Board member Peter Praet noted that the central bank if preparing a range of policy measures to boost growth.

The latest comments from Praet and others come on the heels of last week's remarks by ECB President Mario Draghi indicating that the bank is ready to cut interest rates next month.

On the economic front, the Labor Department released showing that U.S. producer prices rose at their fastest pace in over a year in April.

The Labor Department said its producer price index for final demand rose by 0.6 percent in April following a 0.5 percent increase in March. Economists had been expecting producer prices to edge up by about 0.2 percent.

Core producer prices, which exclude food and energy, also showed continued growth, climbing by 0.5 percent in April after rising by 0.6 percent in March. Core prices had been expected to rise by 0.2 percent.

Trading on Thursday is likely to be impacted by the release of a slew of U.S. economic data, including reports on weekly jobless claims, industrial production, and consumer price inflation.