Short maturity bonds rose on Wednesday after minutes from the Federal Reserve's September policy meeting showed members debated about forward guidance on the timing of rate hikes, but ultimately decided to remain data-dependent.
The Central Bank also cut its growth outlook due to the higher dollar, as a number of committee participants expressed concern about global weakness.
Yields on short-medium dated Treasurys fell to session lows after the announcement and benchmark 10-year sovereign bonds were flat in price and yielding 2.34 percent after the announcement. The maturity rose in price on Tuesday to close at 2.35 percent after a solid 3-year note sale.
Thirty-year bonds dropped 11/32 in price to yield 3.07 percent, having risen to their highest level since May 2013 on Tuesday.
The Treasury Department auctioned $21 billion in 10-year notes at a high yield of 2.381 percent, the lowest since June 2013. The low yield ebbed demand as traders cautiously awaited the minutes from the Federal Open Market Committee (FOMC)'s meeting in September.
The bid-to-cover ratio, an indicator of demand, was 2.52, below a recent average of 2.71 and the weakest since August 2013.
Indirect bidders, which include major central banks, were awarded 44.4 percent, below the 46 percent recent percent average.
Direct bidders, which includes domestic money managers, brought 6.6 percent—the weakest level since August 2012—compared to a recent average of 17 percent.
Prices pared earlier gains after benchmark U.S. stock indexes and the dollar turned higher as a global risk sell-off eased.
"The market may well have got ahead of itself following September's meeting that saw the "dots" point to a more hawkish Federal Reserve and suggestions that rate hikes might come sooner and be more frequent than was previously thought," said Angus Campbell, a senior analyst at FxPro, in a note on Wednesday.