Treasuries Climb Off Worst Levels But Still Close Lower

(RTTNews) - Following the rebound seen in the previous session, treasuries moved back to the downside during the trading day on Wednesday.

Bond prices regained ground after an initial drop but still ended the day in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.5 basis points to 2.755 percent.

The initial weakness among treasuries came as upbeat corporate results offset concerns about the outlook for global economic growth.

Traders shrugged off reports the U.S. rejected China's offer to hold a preparatory meeting in Washington ahead of next week's high-level trade talks.

White House economic adviser Larry Kudlow told CNBC the two sides were on track to have "very, very important" high-level talks at the end of the month that will be "determinative."

Selling pressure waned shortly after the start of trading, however, as traders expressed uncertainty about the economic impact of the ongoing U.S. government shutdown.

In an interview with CNN, a top economic adviser to President Donald Trump acknowledged the shutdown could lead to a lack of economic growth in the first quarter.

White House Council of Economic Advisers Chairman Kevin Hassett conceded the U.S. could see zero growth if the shutdown continues for the whole quarter.

"It is true that if we get a typically weak first quarter and extended shutdown that we could end up with a number that is very low," or "very close to zero," Hassett said.

However, Hassett predicted second quarter growth would subsequently be "humongous" assuming the government reopened.

Following a quiet day on the U.S. economic front, trading on Thursday may be impacted by reaction to reports on weekly jobless claims and leading economic indicators.