WASHINGTON (dpa-AFX) - After moving sharply lower early in the session, treasuries have shown a substantial turnaround over the course of the trading on Wednesday.
Bond prices have climbed well off their worst levels of the day and into positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, has fallen 3.2 basis points to 5.185 percent after surging to a high of 5.329 percent.
The initial weakness among treasuries came after the Labor Department released its closely watched report on consumer price inflation in the month of September.
The bigger than expected increase in core prices led to renewed concerns about the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting later this month.
The report said consumer prices climbed by 0.6 percent in September after rising by 0.4 percent in August. The increase in prices matched economist estimates.
The Labor Department also said the annual rate of consumer price growth jumped to 3.7 percent in September from 3.4 percent in August, which was also in line with expectations.
Meanwhile, the report said core consumer prices, which exclude food and energy prices, rose by 0.3 percent for the second straight month. Economists had expected core prices to edge up by 0.2 percent.
The annual rate of core consumer price growth accelerated to 2.6 percent in September from 2.4 percent in August, coming in slightly above economist estimates for 2.5 percent growth.
Selling pressure waned over the course of the morning, however, as traders looked ahead to the release of an avalanche of U.S. economic data on Thursday, including reports on producer prices, retail sales and weekly jobless claims.
The subsequent recovery by treasuries came as stocks on Wall Street moved sharply lower, suggesting some investors are rotating back into the relative safety of the bond market.
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