Short-term yields hit 1-week highs after Fed minutes

Bond yields traded higher on Wednesday after the minutes from the Federal Reserve's most recent meeting suggested the central bank would forge ahead with its current rate hike plan.

Two-year note yields hit a one-week high of 0.54 percent after the announcement. The maturity was last flat with the yield at 0.52 percent. Meanwhile, U.S. three-year notes rose to a one-week high of 0.89 percent, before cooling.

The publication of the Federal Open Market Committee minutes of the 17th-18th March meeting showed Fed members were torn over rate hike timing, with some seeing the first increase happening in 2016.

"Participants continued to think that an increase in the target range for the federal funds rate was unlikely in April," the minutes stated. "But, with continued improvement in economic conditions, they preferred language that would provide the Committee with the flexibility to subsequently adjust the target range for the federal funds rate on a meeting-by-meeting basis."

Yields inched up earlier after the U.S. government's auction of 10-year Treasury notes drew average demand.

The Treasury Department auctioned $21 billion in 10-year notes at a high yield of 1.925 percent, the lowest since May 2013. The bid-to-cover ratio, an indicator of demand, was 2.62. That was lower than last month's bid-to-cover ratio of 2.65 and below the recent average of 2.69.

Yields on the U.S. 10-year Treasury note yields last traded higher at 1.896 percent on Wednesday, after closing at 1.893 percent Tuesday. Meanwhile, the 30-year Treasury note yield rose to 2.52 percent after closing at 2.53 percent Tuesday.

Indirect bidders, which include major central banks, were awarded 58.5 percent, which was the smallest share since January, but above the 49 percent recent average.

Direct bidders, which includes domestic money managers, brought 9.3 percent, versus a recent average of 12 percent. That was the groups largest share since January.

The auction was the second of three this week. The U.S. Treasury will sell $13 billion in 30-year bonds on Thursday.

Read MoreBoiling oil, a dovish Fed and the start of earnings season

US 10-YR
US 30-YR

A U.S. three-year auction on Tuesday drew decent demand, with the government paying a lower yield than expected, according to Reuters.

Oil will also be in focus Wednesday, as prices fell more than a percent after data from the American Petroleum Institute (API) showed U.S. crude stocks surged 12.2 million barrels last week against analyst expectations for an increase of 3.4 million barrels.

The price fall follows a rally seen on Tuesday, when U.S. crude approached 2015 highs. Brent May crude was down around $2.50 at $57.50 a barrel in early London trading, and U.S. May crude dropped about $3 to $52.50 a barrel after a report showed U.S. crude stockpiles jumped 10.95 million barrels to a record 482.39 million last week. That was the largest weekly increase since 2001.

—CNBC's Jenny Cosgrave contributed to this report.