On Tuesday, US Treasury securities experienced a notable rise, recovering from the significant declines observed in the prior two trading sessions.
Throughout the day, bond prices fluctuated initially dipping after an early gain but later regaining strength in the afternoon. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, dropped by 6.5 basis points to 4.404 percent.
Though this decrease partly counterbalanced the previous surge, the ten-year yield still remained substantially higher than the two-month closing low recorded last Thursday.
A resurgence of buying interest occurred in the afternoon after the Treasury Department reported that this month's auction of $39 billion worth of ten-year notes saw above-average demand.
The auction concluded with a high yield of 4.438 percent and a bid-to-cover ratio of 2.67, whereas the previous ten auctions averaged a bid-to-cover ratio of 2.50.
The bid-to-cover ratio serves as a metric for demand, reflecting the proportion of bids received for each dollar's worth of securities sold.
Meanwhile, traders also turned their focus to two potentially significant economic events scheduled for Wednesday.
Initial trading on Wednesday is expected to be influenced by the Labor Department's highly anticipated report on consumer price inflation for May.
Economists predict a marginal increase in consumer prices by 0.1 percent for May, following a 0.3 percent rise in April. Core consumer prices, which exclude food and energy costs, are projected to increase by 0.3 percent for the second consecutive month.
The annual growth rate of consumer prices is expected to remain steady at 3.4 percent, while the annual core consumer price growth rate is anticipated to decelerate to 3.5 percent in May from 3.6 percent in April.
This data could considerably influence expectations for future interest rates ahead of the Federal Reserve's monetary policy announcement later in the day.
Although it is widely anticipated that the Fed will maintain current interest rates, traders are likely to scrutinize the accompanying statement and officials' latest economic projections and interest rate forecasts.
