Treasuries End Mixed

Market players booked profits from recent rallies

Treasuries finished relatively flat to modestly higher on Wednesday, as market players booked profits from recent rallies. The Fed's Beige Book, an anectdotal report of the economy's health, said the economy is "generally weak" but there are some signs of "scattered improvement." The report also acknowledged that a recovery is likely by "midyear or earlier, but the timing and strength are uncertain." S&P MMS says the remarks were consistent with much of the recent commentary by Fed officials.

Additionally, the report said that while retail sales remain overall weak, there had been some pick-up. Manufacturing is showing signs of a rebound in some regions. It's not obvious from this report that another interest rate cut is in the offing -- but it doesn't shut the door on one, either.

In other economic news, U.S. business inventories plunged 1% in November. Sales were down 1.4%. The inventory-to-sales ratio held steady at 1.39. The data will pull down fourth-quarter GDP, according to MMS, but should imply a sizeable bounce-back in the early part of this year.

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