Following a pullback in the previous session, treasuries experienced a strong rebound during Tuesday's trading.
Bond prices rose early and climbed further into positive territory as the day progressed. Consequently, the yield on the benchmark ten-year note, which moves inversely to its price, dropped 6.2 basis points to 4.217 percent.
This decline in the ten-year yield largely offset the 6.6 basis point increase recorded on Monday, closing just shy of last Friday's two-month low.
The recovery in treasuries was spurred by a Commerce Department report indicating that U.S. retail sales increased slightly less than expected in May.
According to the Commerce Department, retail sales inched up by 0.1 percent in May after a revised 0.2 percent decline in April.
Economists had anticipated a 0.2 percent rise in retail sales compared to the initially reported unchanged figure for the previous month.
Excluding motor vehicle and parts dealers, retail sales edged down by 0.1 percent in May following a revised 0.1 percent decline in April.
Economists had projected ex-auto sales to increase by 0.2 percent, consistent with the initial report for the previous month.
"The much-anticipated retail sales report pushed Treasury yields lower as it came in weaker than estimates. However, it was the downward revisions for the two previous months that raised concerns among analysts that lower and middle-income wage earners are currently under significant pressure from both prices and higher inflation," stated Quincy Krosby, Chief Global Strategist for LPL Financial.
In a separate report, the Federal Reserve revealed that industrial production surged more than expected in May.
The Fed reported that industrial production jumped by 0.9 percent in May after remaining unchanged in April, whereas economists had forecast a 0.3 percent rise.
Following the Juneteenth holiday on Wednesday, Thursday's trading may be influenced by reactions to upcoming reports on weekly jobless claims and housing starts.
