WASHINGTON (dpa-AFX) - Treasuries rebounded following a three-day sell-off early in the session on Thursday but gave back ground over the course of the trading day.
Bond prices pulled back well off their early highs before ending the day roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down less than a basis point to 4.394 percent after hitting a low of 4.289 percent.
Treasuries initially benefitted from bargain hunting following the recent nosedive, which resulted in a 41.5 basis point spike by the ten-year yield to its highest closing level in well over a month.
Buying interest waned shortly after the start of trading, however, as traders continue to worry about rising trade tensions between the U.S. and China.
President Donald Trump announced a 90-pause on new 'reciprocal tariffs' on most countries on Wednesday, but he excluded China from the pause and even announced he was raising the tariff on Chinese goods to 125 percent.
The U.S. and China have been engaged in a tit-for-tat exchange on trade in recent days, with China increasing its tariffs on U.S. goods to 84 percent from 34 percent after Trump previously raised the total rate on Chinese imports to 104 percent.
While treasuries are usually seen as a safe haven amid times of turmoil, the dispute has led to speculation China is dumping their bond holdings as part of their retaliation to Trump's tariffs.
Meanwhile, traders largely shrugged off a Labor Department report unexpectedly showing a slight decrease by U.S. consumer prices in the month of March, potentially viewing the data as 'old news.'
The report said the consumer price index edged down by 0.1 percent in March after rising by 0.2 percent in February. Economists had expected consumer prices to inch up by 0.1 percent.
Excluding food and energy prices, the core consumer price index crept up by 0.1 in March after rising by 0.2 percent in February. Core prices were expected to rise by 0.3 percent.
The report also said the annual rate of consumer price growth slowed to 2.4 in March from 2.8 percent in February. Economists had expected the pace of price growth to slow to 2.6 percent.
The annual rate of core consumer price growth also fell to 2.8 percent in March from 3.1 percent in February. Core price growth was expected to dip to 3.0 percent.
'The March CPI was stale data even before it was released given the large tariff changes in motion and the inflationary impact it will have in the coming months,' said Nationwide Chief Economist Kathy Bostjancic.
She added, 'While it is marginally helpful to have a softer reading heading into the ratcheting up of tariffs, many of the categories that experienced a decline or were tame will face upward pressure in the coming months.'
Reports on producer price inflation and consumer sentiment may attract some attention on Friday, while traders are also likely to keep an eye on as the latest tariff developments.
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