Treasuries continued their recent downward trajectory during Wednesday's session, experiencing moderate weakness. Initially, bond prices fell but subsequently recuperated some losses before declining again later in the day. Consequently, the yield on the benchmark ten-year note, which inversely relates to its price, climbed by 3.8 basis points, closing at 4.242 percent. This marks the fourth time in five sessions that the ten-year yield has closed higher, reaching its highest level in nearly three months.
The persistent softness in treasuries is largely driven by ongoing concerns that the Federal Reserve may not reduce interest rates as swiftly as previously predicted. While a quarter-point rate cut is still anticipated next month, skepticism is mounting regarding another cut in December. According to the CME Group's FedWatch Tool, the likelihood that the Fed will maintain rates in December has surged to 30.2 percent, up from 13.9 percent a week earlier.
In U.S. economic developments, the National Association of Realtors released data indicating a surprising continued decline in existing home sales for September. Specifically, sales fell by 1.0 percent, reaching an annual rate of 3.84 million, following a 2.0 percent decline to a revised rate of 3.88 million in August. Economists had anticipated a 1.0 percent increase, expecting sales to hit 3.90 million, up from a previously reported 3.86 million the preceding month.
As trading proceeds into Thursday, investor response to the latest U.S. economic indicators, including jobless claims and new home sales reports, may significantly influence market activity.
