2023.03.2920:19:00UTC+00Treasuries Finish Lackluster Session Nearly Unchanged

After an early move to the downside, treasuries showed a lack of direction over the course of the trading session on Wednesday.

Bond prices recovered from the early weakness and spent the rest of the day lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 3.566 percent.

The early weakness among treasuries reflected recent downward momentum, with easing concerns about turmoil in the banking industry reducing the safe-haven appeal of bonds.

Selling pressure waned shortly after the start of trading, however, as traders looked ahead to some key U.S. economic data later in the week.

Friday's report on personal income and spending in the month of February is likely to be in focus, as it includes a reading on inflation said to be preferred by the Federal Reserve.

With the Fed signaling last week that it expects just one more interest rate increase this year, traders will look to the data for clues about the timing of the final rate hike.

CME Group's FedWatch Tool currently indicates a 58.1 percent chance the Fed will leave rates unchanged at its next meeting in early May and a 41.9 percent chance of a 25 basis point increase.

In the U.S. economic news, the National Association of Realtors released a report showing pending home sales in the U.S. unexpectedly increased for the third straight month in February.

NAR said its pending home sales index climbed by 0.8 percent to 83.2 in February after spiking by 8.1 percent to 82.5 in January. Economists had expected pending home sales to slump by 3.0 percent.

The pending home sales index reached its highest level since hitting 88.3 last August but was still down by 21.1 percent compared to a year ago.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Trading on Thursday may be impacted by reaction to a report on weekly jobless claims as well as a revised reading on fourth quarter GDP.