U.S. sovereign bonds gave up earlier gains Wednesday after the benchmark yield hit a new all-time low.
Ten-year Treasury notes fell to yield 1.3868 percent, after hitting a record low. Bond yields move inversely to prices. Thirty-year bond yields also hit a fresh record low Wednesday, at 2.098 percent, before trading higher at 2.1590 percent.
On the U.S. data front, the international trade deficit came in at $41.1 billion in May, above an estimate of $40 billion.
Meanwhile, the Institute for Supply Management (ISM) said its index of non-manufacturing activity rose to 56.5 in June from 52.9 the month before. The reading was above expectations of 53.3 from a Reuters poll of 62 economists and was the highest reading since November.
"The strong ISM non-manufacturing print may be a contributing cause, but the timing rejects that thesis. Bonds reached their intraday highs at about 8AM EDT and have been selling off ever since. The ISM non-manufacturing number triggered about 2 basis points of the 7 basis point move from the yield lows," Guy LeBas, chief fixed income strategist at Janney Montgomery Scott, told CNBC by email.
"The strong ISM non-manufacturing print may be a contributing cause, but the timing rejects that thesis. Bonds reached their intraday highs at about 8AM EDT and have been selling off ever since. The ISM non-manufacturing number triggered about 2 basis points of the 7 basis point move from the yield lows," he said.
Meanwhile, DoubleLine Capital's Jeffrey Gundlach said it was not prudent to buy 10-year Treasurys at these yields, calling them the "worst trade location" ever.
Investors also digested the minutes from the Federal Reserve's June meeting, which showed several officials believed it would be prudent to wait for more data, and the Brexit vote, before raising rates.
Earlier, German bunds and Dutch bonds rose to yield new record lows, according to Reuters. The yield on Japanese 20-year government bonds turned negative for the first time on Wednesday, according to Dow Jones.
Brexit and global growth fears pushed investors back into "risk-off" mode on Tuesday and this continued on Wednesday. The latest spur was the suspension of three U.K. commercial property funds this week, which was seen by some as the first sign of markets seizing up following the U.K.'s vote to leave the European Union.
Friday's official non-farm payroll will be the next big data event.
"Any further deceleration in the pace of U.S. employment (and hence economic) growth would take the global economy even closer to stalling speed," Kit Juckes, strategist at Societe Generale, said in a note on Wednesday.
—Reuters contributed to this report.