US Treasury prices rally

US Treasury debt prices rose mildly on Wednesday as investors awaited data on the US retail sector for clues as to whether consumers will help fuel a rebound in economic growth.
The Federal Reserve appeared to cling to such hope, arguing on Tuesday that the economy was due for another bout of expansion after a recent slowdown.
July US retail sales data are due out early Thursday.
The volatile oil markets were high on investors' list of priorities, with a recent spike in prices having mixed implications for bonds.
Inflationary pressures hurt returns on fixed-income securities, but higher oil costs also slow growth, to the benefit of safe-haven government debt.
The safe-haven effect seemed to gain the upper hand for now, with the benchmark 10-year note rising 5/32 for a yield of 4.27 percent from 4.30 percent on Thursday.
Treasury sold $15 billion in new five-year notes on Wednesday, an auction that was met with relatively solid demand. The market was also awash in corporate debt with around $5 billion worth being launched.
The new Treasury notes went at a high yield of 3.52 percent and drew bids for 2.64 times the amount on offer, above July's 2.33 level.
Indirect bidders, including customers of primary dealers and foreign central banks, picked up $6.25 billion or 42 percent of the whole issue. That was up from July's 38 percent but still down from June's record 56 percent. Primary dealers themselves got $8.52 billion of the issue.
The current five-year note edged up 4/32 in price, lowering its yield to 3.48 percent from 3.50 percent on Tuesday. In when-issued trading, yields on the new five-year paper had hovered around 3.5225 percent before the sale.
Likewise, the 30-year bond was up 5/32, sending yields down to 5.06 percent. Two-year notes inched up 2/32 for a yield of 2.50 percent, down from 2.53 percent late Tuesday.
Bonds had been taken aback on Tuesday when the Fed argued, despite dismal jobs figures last week, that the economy was poised for another expansionary jolt.
Two-year yields jumped on Tuesday after the Fed's dogged optimism on the economy forced the market to narrow the odds on a rate hike at its next meeting in September.