Treasuries moved notably higher over the course of the trading day on Wednesday on the heels of the release of some disappointing economic data.

Bond prices showed a strong move to the upside in early trading and remained firmly positive throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6.6 basis points to 1.868 percent.

With the drop on the day, the ten-year yield offset the gains seen in the middle of last week, falling to its lowest closing level in nearly two months.

The strength among treasuries came as the disappointing economic data eased concerns about the Federal Reserve raising interest rates sooner than anticipated.

Early in the day, payroll processor ADP released a report showing a continued slowdown in the pace of private sector job growth in the month of March.

ADP said private sector employment climbed by 189,000 jobs in March following a slightly upwardly revised increase of 214,000 jobs in February. Economists had expected an increase of about 230,000 jobs.

With the continued slowdown, the pace of private sector job growth came in below 200,000 for the first time since January of last year.

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth took a step back in March. The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market.”

A separate report from the Institute for Supply Management showed that the pace of growth in manufacturing activity slowed by more than anticipated in March.

The ISM said its purchasing managers index dropped by 1.4 points to 51.5 in March after edging down 0.6 points to 52.9 in February.

While a reading above 50 indicates continued growth in manufacturing activity, economists had expected the index to show a more modest drop to 52.5.

Peter Boockvar, managing director at the Lindsey Group, said, “Say what you will, the U.S. economy has dramatically slowed in Q1.”

“We hope though we’ll see a repeat of last year in that Q2 and Q3 rebound, but if not, it has obvious implications for Fed policy,” he added.

Economic data is likely to remain in focus on Thursday, as traders will be presented with reports on weekly jobless claims, international trade, and factory orders.

Trading activity may be somewhat subdued, however, as some investors may look to get a head start on the long holiday weekend.

The material has been provided by InstaForex Company –