Bonds

Treasury yields dip after Fed minutes highlight coronavirus risk

Treasury yields pared gains on Wednesday after Federal Reserve officials highlighted the risks from the deadly coronavirus in the minutes of their last policy meeting.

Treasurys

The yield the benchmark 10-year Treasury note, which moves inversely to price, turned lower to trade little changed on the day at about 1.5619%, while the yield on the 30-year Treasury bond was also flat at around 2.0031%.

Fed officials highlighted concerns at their most recent meeting about the coronavirus, the minutes showed, though the spread of the disease had just become an issue at the time of the meeting.

"Some trade uncertainties had diminished recently, and there were some signs of stabilization in global growth. Nonetheless, uncertainties about the outlook remained, including those posed by the outbreak of the coronavirus," the minutes released on Wednesday stated.

Yield were higher earlier in the session after the Bureau of Labor Statistics said producer price inflation in January came in above projections. Headline inflation rose 0.5% month over month, marking the highest since Oct. 2018.

Data on January housing starts was also stronger than expected across the board. U.S. homebuilding fell less than expected in January while permits surged to a near 13-year high, the Commerce Department said on Wednesday.

Investors are also closely monitoring the coronavirus and its potential impact on the global economy. China's National Health Commission reported an additional 1,749 cases of the coronavirus nationwide, with 136 deaths. As of Feb. 18., the commission said there had been a total of 74,185 confirmed cases and 2,004 cumulative deaths.

"That Treasuries are only slightly weaker in response speaks to how data un-dependent trading has become as the broader question and focus remains on discerning the scale of the COVID-19 virus's negative consequences," Jon Hill, BMO's rates analyst, said in a note on Wednesday.

There are no major U.S. Treasury auctions scheduled on Wednesday.

—CNBC's Sam Meredith contributed reporting.