WASHINGTON (dpa-AFX) - After ending the previous session of their best levels but still modestly higher, treasuries saw further upside during trading on Wednesday.
Bond prices recovered from an initial pullback and advanced early in the session before remaining positive for the rest of the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.0 basis points to 4.545 percent.
The ten-year yield added to the 2.4 basis point dip seen on Tuesday, continuing to give back ground after ending Monday's trading at a nearly two-month closing high.
The continued strength among treasuries came following the release of a report from the Labor Department showing producer prices fell by more than expected in the month of June.
The Labor Department said its producer price index for final demand fell by 0.3 percent in June after climbing by a downwardly revised 0.6 percent in May.
Economists had expected producer prices to edge down by 0.1 percent compared to the 1.1 percent jump originally reported for the previous month.
The report also said the annual rate of producer price growth slowed to 5.5 percent in June from a downwardly revised 6.0 percent in May.
Economists had expected the annual rate of producer price growth to slow to 6.2 percent from the 6.5 percent originally reported for the previous month.
Following yesterday's weaker-than-expected consumer price inflation data, the report has further eased concerns about the outlook for inflation and interest rates.
'Traders are rapidly retreating from rate-hike bets,' FHN Financial Chief Economist Chris Low. 'Fed funds futures see the odds of a hike this month now at 9% and have a hike fully priced in by December. Yesterday, it was September.'
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