NEW YORK Government debt prices extended their earlier gains on Wednesday, hitting session highs, ahead of a $35 billion auction of new five-year note supply.
Data from the Fed's latest purchase operation earlier showed primary dealers offered to sell to the Fed a below-average amount of Treasuries.
Some traders interpreted the data as a positive sign for the bond market after it suffered its worst weekly sell-off since last summer two weeks earlier.
Benchmark 10-year Treasury notes last traded up 6/32 in price to yield 2.16 percent, down 2 basis points from late Tuesday and below its 200-day moving average.
The five-year note was up 3/32, erasing an earlier 4/32 decline. The five-year yield fell below its 200-day moving average and under 1 percent for the first time in two weeks at 0.996 percent.