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US Treasury yields waver after Fed minutes

Federal Reserve Chair Janet Yellen
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Federal Reserve Chair Janet Yellen

U.S. sovereign bond yields wavered Wednesday, as investors picked apart the minutes from the Federal Reserve's last meeting and digested further security scares in Paris.

The minutes from October's Federal Open Market Committee (FOMC) meeting showed a solid core of Fed officials rallied behind a possible December rate hike. But central bankers also debated evidence the U.S. economy's long-term potential may have permanently shifted lower.

"The FOMC minutes will be examined above all for why the reference to 'international developments' was left out of the October statement, though New York Fed President Bill Dudley has already suggested that the FOMC effectively misread and panicked about developments in Chinese financial markets and their consequences for the Asian and global economic outlook," said Marc Ostwald, global fixed income, foreign exchange and emerging markets strategist with ADM Investor Services International.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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Yields on the 10-year Treasury note were slightly higher around 2.2693 percent on Wednesday, after closing at 2.261 percent on Tuesday.

Meanwhile, 30-year bond yields were lower at 3.0403 percent after ending at 3.047 percent Tuesday.

In Europe, German bund yields sank after five people were arrested and at least one was killed in a police raid on Saint-Denis, Paris early on Wednesday morning.

Yields on safe-haven 10-year German government paper tumbled to trade around 0.5 percent, down from 0.531 percent in the previous session.

Back in the U.S., as well as Fed minutes there are also a number of Fed officials due to speak Wednesday, including Richmond Fed President Jeffrey Lacker, who was on "Squawk Box." He said he is still in favor of a rate hike despite Friday's attacks in Paris.

New York Fed President Bill Dudley, Cleveland Fed President Loretta Mester and Atlanta Fed President Dennis Lockhart were on a panel in the morning at the Clearing House Annual Conference in New York.

Dallas Fed President Rob Kaplan spoke at noon on the economy, saying the Fed's policy-making committee was "prudent" not to raise rates in recent meetings. Former Fed Chairman Ben Bernanke was also at the Economic Club of New York.

Oil could also remain a factor Wednesday, as U.S. crude futures fell below $40 for the first time since August. U.S. data showed a smaller than forecast build in crude inventories.

Crude oil settled 0.2 percent higher at $40.75 a barrel. It followed a more than $1 fall during the previous session. Brent crude rose slightly to about $44.21 per barrel.