Treasuries have moved to the downside Wednesday morning after showing considerable strength late in the previous session. The late-day rally on Tuesday came after the Federal Reserve's announcement that it will begin buying long-term treasuries today.

Investors are digesting a fresh batch of economic data on mortgage applications and goods orders that unexpectedly beat analysts' expectations, prompting some movement out of the safety of treasuries.

Traders are also looking ahead to more data from the housing sector later this morning, with new home sales figures due out at 10 AM ET. While economists expect new home sales to fall to 300,000 in February, recent housing data has come in better than expected.

The benchmark ten-year note has moved off its low for the session, although it remains in firmly negative territory. Subsequently, the yield on the ten-year note is up 7.6 basis points at 2.73 percent.

Industry data released on Wednesday showed that mortgage application volume rose over 32 percent last week. Rates fell to 6-year lows, spurring a 41.5 percent jump in refinancing activity.

Overall, recent Fed action has led to a fall in interest rates and encouraged both the purchase and refinancing of mortgages.

The Mortgage Bankers Association revealed that its market index of mortgage application volume jumped 32.2 percent on a seasonally adjusted basis for the week of March 20th, following a 21 percent jump last week.

On an unadjusted basis, the index increased 31.4 percent and 18 percent on a year-over-year basis.

In other economic news, durable goods orders unexpectedly showed a substantial increase in the month of February, according to a report released by the Commerce Department, with the increase coming after six consecutive monthly decreases.

The report showed that durable goods orders jumped 3.4 percent in February after falling by a revised 7.3 percent in January. Economists had been expecting durable goods orders to fall by 2.5 percent compared to the 4.5 percent decrease that had been reported for the previous month.

The news came as a positive surprise to investors, who have regained some risk appetite in recent trading.

Further dampening interest in the safety of treasuries Wednesday is the $34 billion auction of five-year notes scheduled for 1 PM ET. Meanwhile, $24 billion worth of seven-year notes will be sold on Thursday.

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