US Treasury prices rose on Wednesday as fund managers bought back debt previously sold to square books before the end of the month and the quarter.
"The higher prices all seem to be quarter-end related," said Brian Robinson, senior bonds strategist with 4Cast Ltd in New York. "It's a phenomenon that occurs every single month, but March happens to be the end of the quarter, so that means something extra in terms of benchmarking."
Money managers picked up longer-dated debt in an end-of- month and end-of-quarter effort to extend the average duration of their portfolios to match benchmark indexes.
The market also took support from bullish manufacturing data earlier in the day, which although still robust by historical standards, pointed toward a slowing in the brisk economic growth seen early in the year and provided further reason for the Federal Reserve to keep interest rates low.
As of late afternoon, the 10-year note had gained 15/32 in price, pushing its yield to 3.84 percent from 3.90 percent late on Tuesday.
Yields hit an eight-month low at 3.65 percent earlier this month before going as high as 3.92 percent on Monday.
Five-year notes gained 10/32, taking yields to 2.78 percent from 2.85 percent. The 30-year rose 22/32, lowering its yield to 4.77 percent from 4.82 percent.
At the very short end, yields on two-year notes dipped to 1.57 percent from 1.62 percent. Data released Wednesday morning showed the Chicago Purchasing Management's Midwest business activity index dropped to 57.6 in March from 63.6 in February. Analysts had looked for a dip to 61.5.
Perhaps more significant to the bond market, given recent payroll concerns, the survey's employment index fell to 49.2 in March, reversing February's jump to a six-year high of 54.8.
The employment index numbers took some of the shine off expectations Friday's March payrolls report will finally show some rejuvenation in jobs.
Median estimates in a Reuters survey are for payrolls to rise a modest 103,000 in March, but some in the market have been touting a much higher outcome.