MARKETSCOPE : Treasury prices recovered modestly on Wednesday from their losses Tuesday.
The 10-year note rose 04/32 to 98-13/32 for a yield of 4.70%, while the 30-year bond climbed 11/32 to 96-14/32 for a yield of 4.72%. The intraday trading range was relatively narrow and trading was subdued.
Investors awaited the February existing home sales report Thursday. Markets continued wondering how long the Federal Reserve will maintain its credit tightening policy. The Federal Open Market Committee meets next week, when it might move on rates.
Fed Chairman Bernanke, in a recent letter to Rep. Brad Sherman, D-Calif., said the chronic U.S. trade gap need not fuel a "precipitous" decline in the dollar, but he said the economy may be able to shrug it off if it did. While Bernanke played down worries over the current account deficit, Bernanke said "the possibility of a future disruptive correction of the U.S. trade deficit cannot be ruled out... the best way to protect the U.S. economy from such an event is to continue policies designed to maintain the stability of the financial system and the flexibility and resilience of the economy," he said. Bernanke said current policy was to let markets determine the dollar's value.