WASHINGTON (dpa-AFX) - After showing a strong move to the upside early in the session, treasuries gave back ground over the course of the trading day on Wednesday.
Bond prices pulled back well off their highs of the session before ending the day roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 4.682 percent after hitting a low of 4.646 percent.
The early strength among treasuries came as relatively tame consumer price inflation data eased concerns about the outlook for interest rates.
Early in the day, the Labor Department released a report showing consumer prices crept up in line with economist estimates in the month of July.
The Labor Department said consumer prices inched up by 0.1 percent in July after falling by 0.4 percent in June. The uptick in consumer prices matched economist estimates.
The report also said core consumer prices, which exclude food and energy prices, rose by 0.2 percent in July after coming in unchanged in June. The increase in core prices also matched expectations.
The annual rate of growth by consumer prices edged down to 3.4 percent in July from 3.5 percent in June, while the annual rate of growth by core consumer prices slipped to 2.5 percent in July from 2.6 percent in June. The modest slowdowns also came in line with estimates.
Buying interest waned over the course of the session, however, as the recent resurgence of Middle East tensions and the subsequent spike in crude oil prices have led to worries about a reacceleration in inflation.
While U.S. crude oil futures are little changed on the day, they remain elevated following the sharp increase seen over the past few sessions.
Outside mediators continue to make efforts to bring the U.S. and Iran back to the negotiating table, but the rhetoric from the two countries' leaders suggest the conflict is not likely to end soon.
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