Treasuries showed a lack of direction over the course of the trading session on Wednesday before ending the day nearly flat.
Bond prices spent the day bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.579 percent.
The ten-year yield showed only a slight drop on the day but still ended the session at its lowest closing level in three months.
The choppy trading on the day came as traders awaited the Federal Reserve's monetary policy decision, although treasuries remained little changed following the announcement.
As was widely expected, the Fed announced that interest rates will remain at near-zero levels amid the economic hardship imposed by the coronavirus pandemic.
The Fed said it decided to maintain the target range for the federal funds rate at 0 to 0.25 percent, where it has remained since an emergency rate cut on March 15.
The accompanying statement noted economic activity and employment have picked up somewhat in recent months following sharp declines but remain well below their levels at the beginning of the year.
The central bank partly attributed the recent improvement in overall financial conditions to policy measures to support the economy and the flow of credit to U.S. households and businesses.
The Fed also reiterated that it remains committed to using its full range of tools to support the U.S. economy in this challenging time.
Some investors may have been disappointed the Fed's statement did not provide specific clues about further stimulus, although it did not impact the bond markets.
Traders also shrugged off a report from the National Association of Realtors showing another significant increase in pending home sales in the month of June.
NAR said its pending home sales index surged up by 16.6 percent to 116.1 in June after skyrocketing by 44.3 percent to 99.6 in May. Economists had expected pending home sales to jump by 15.0 percent.
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.
With the continued increase in contract activity, pending home sales in June were up by 6.3 percent compared to the same month a year ago.
Trading on Thursday may be impacted by reaction to the weekly jobless claims report as well as a preliminary reading on GDP in the second quarter.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2161136/
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