Treasuries moved to the upside during trading on Tuesday, offsetting the modest weakness seen in the previous session.
Bond prices moved steadily higher in morning trading before giving back ground in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.6 basis points to 1.549 percent.
The rebound by treasuries came as traders looked ahead to the Federal Reserve’s monetary policy announcement on Wednesday.
The Fed is expected to announce plans to begin gradually scaling back its $120 billion in monthly bond purchases by mid-November or December.
The language of the Fed’s statement is likely to be in focus as traders look for clues about the outlook for interest rates amid concerns about the high rate of inflation.
However, a lack of major U.S. economic data kept some traders on the sidelines ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.
The Fed announcement is likely to be in the spotlight on Wednesday, overshadowing separate reports on private sector employment, service sector activity and factory orders.