U.S. Treasury bonds pared some gains after spiking earlier on Wednesday, with the 10-year yield dropping to its lowest yield since late May, as geopolitical uncertainty had investors seeking the perceived safety of government debt.
Benchmark U.S. stock indexes closed with modest gains Wednesday after the morning rally in Treasurys faded, with the 10-year Treasury note ending 4/32 higher in price at a yield of 2.47 percent. Earlier, the issue yielded 2.433 percent, its highest since May 28.
Thirty-year Treasury bonds were closed up 5/32 in price to yield 3.27 percent after touching a yield high on Tuesday of 3.33 percent during trading shaped by bullish U.S. economic data.
Investor concerns about the timing of Federal Reserve interest-rate hikes were receding, with fat differentials between European and U.S. yields proving increasingly alluring, portfolio managers said.
"The market is not so much, 'Oh my God, the Fed will be raising rates soon.' That is now off the table for a while," said Wilmer Stith, co-manager of the Wilmington Broad Market Bond fund in Baltimore, Maryland.
"Russia possibly being more aggressive over Ukraine is now on the table," Stith said. "U.S. Treasurys are very attractive on a yield basis with German 10-year bonds at 1.1 percent and ours now at 2.44."