WASHINGTON (dpa-AFX) - After showing a strong move to the upside early in the session, treasuries gave back ground over the course of the day on Wednesday.
Bond prices pulled back well off their best levels but managed to end the day slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped less than a basis point to 4.266 percent after hitting a low of 4.198 percent.
The ten-year yield edged lower for the second straight session after reaching its highest closing level in over three months on Monday.
The early strength among treasuries came after the Commerce Department released a report showing U.S. economic growth unexpectedly slowed in the third quarter.
The Commerce Department said gross domestic product shot up by 2.8 percent in the third quarter after surging by 3.0 percent in the second quarter. Economists had expected another 3.0 percent jump.
The unexpected slowdown in the pace of GDP growth primarily reflected a downturn in private inventory investment and a larger decrease in residential fixed investment.
On the inflation front, the Commerce Department said the pace of consumer price growth slowed to 1.5 percent in the third quarter from 2.5 percent in the second quarter.
Excluding food and energy prices, core consumer price growth also slowed to 2.2 percent in the third quarter from 2.8 percent in the second quarter.
'The inflation measures in this third quarter report show further progress towards the Fed's inflation target,' said Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni.
He added, 'All in, these data are in line with our forecast, and we expect that the Federal Reserve will cut rates by 25 basis points at its meeting next week.'
Buying interest waned over the course of the session, however, as a separate report from payroll processor ADP showed private sector employment in the U.S. shot up by much more than anticipated in the month of October.
ADP said private sector employment surged by 233,000 jobs in October after jumping by an upwardly revised 159,000 jobs in September.
Economists had expected private sector employment to climb by 115,000 jobs compared to the addition of 143,000 jobs originally reported for the previous month.
The National Association of Home Builders also released a report showing a spike by pending home sales in the month of September.
Trading on Thursday may be impacted by reaction to reports on weekly jobless claims and personal income and spending, which includes the Federal Reserve's preferred inflation readings.
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