Treasuries Move To The Downside After Seeing Initial Strength

(RTTNews) - After moving to the upside early in the session, stocks gave back ground over the course of the trading day on Wednesday.

Bond prices pulled back well off their highs of the session and into negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.4 basis points to 4.046 percent after hitting a low of 4.001 percent.

Treasuries initially benefitted from their appeal as a safe haven amid concerns about trade tensions between the U.S. and China following a Truth Social post by President Donald Trump shortly after the bond markets closed on Tuesday.

Trump accused China of an "economically hostile act" by purposefully not buying U.S. soybeans and threatened to terminate business with China having to do with cooking oil and other elements of trade as retribution.

Buying interest waned shortly after the start of trading, however, leading some traders to cash in on recent strength among treasuries, which dragged the ten-year yield down to its lowest intraday level since dipping below 4.0 percent in mid-September.

In U.S. economic news, the Federal Reserve Bank of New York released a report this morning showing New York manufacturing activity has seen a significant turnaround in the month of October.

The New York Fed said its general business conditions index surged to a positive 10.7 in October after plunging to a negative 8.7 in September, with a positive reading indicating growth. Economists had expected the index to climb to a negative 1.8.

Meanwhile, the Federal Reserve's Beige Book said economic activity in the U.S. has shown little change since early September.

The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said three districts reported slight to modest growth in activity, five reported no change, and four noted a slight softening.

Several key U.S. economic reports had been scheduled to be released on Thursday, but the publication of the data has been indefinitely postponed due to the ongoing government shutdown. Traders are still likely to keep an eye on remarks by several Fed officials.