Treasuries showed a lack of direction over the course of the trading day on Tuesday before ending the session roughly flat.
Bond prices pulled back after an initial advance 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, crept up by less than a basis point to 1.258 percent.
The choppy trading came even though a Commerce Department report showed U.S. retail sales tumbled by much more than expected in the month of July, as treasuries typically benefit from disappointing data.
The report said retail sales slumped by 1.1 percent in July after climbing by an upwardly revised 0.7 percent in June.
Economists had expected retail sales to dip by 0.3 percent compared to the 0.6 percent increase originally reported for the previous month.
Excluding a steep drop in sales by motor vehicles and parts dealers, retail sales fell by 0.4 percent in July after jumping by 1.6 percent in June. Ex-auto sales were expected to inch up by 0.1 percent.
Bond traders may have felt concerns about the economy were priced into the markets following the notable advance seen over the two previous sessions.
A separate report from the Federal Reserve showing industrial production in the U.S. increased by much more than expected in the month of July may also have reduced the appeal of bonds.
The Fed said industrial production advanced by 0.9 percent in July after edging up by a downwardly revised 0.2 percent in June.
Economists had expected industrial production to rise by 0.4 percent, matching the increase originally reported for the previous month.
A report on new residential construction may attract some attention on Wednesday, although traders are likely to pay closer attention to the minutes of the latest Fed meeting.
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