Treasury yields move higher

US Treasury yields edged higher on Wednesday as a report that China will take more steps to bolster its virus-hit economy boosted risk taking, and after US economic data beat economists' expectations. Bloomberg News reported that Beijing was considering cash injections or mergers to bail out airlines hit by the virus, which increased risk appetite, sending stocks higher and reducing demand for safe-haven bonds.

The death toll from the coronavirus climbed above 2,000 in China, but the tally of newly reported cases fell for a second day to the lowest since January. "Equities are performing well, after being under a bit of pressure," said Ian Lyngen, head of US rates strategy at BMO Capital Markets in New York.

The spread of the virus is central to risk appetite as investors weigh how it will affect the global economy. "It really does come down to the impact of the coronavirus on global growth starting in Asia, going into the supply chain, and presumably at some point trickling through to the domestic economic outlook," Lyngen said.

Benchmark 10-year note yields rose two basis points to 1.57%. Economic data on Wednesday showed that US producer prices increased by the most in more than a year in January, boosted by rises in the costs of services such as healthcare and hotel accommodation. US homebuilding also fell less than expected in January, while permits surged to a near 13-year high, pointing to sustained housing market strength amid lower mortgage rates.