Extending the sell-off seen over the past two weeks, treasuries moved notably lower over the course of the trading session on Wednesday.
Bond prices moved steadily lower for much of morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 6.4 basis points to 2.24 percent.
With the continued increase, the ten-year yield matched the closing level seen in early March, which was the highest of 2015 thus far.
The continued weakness among treasuries was partly attributed to a drop in bond prices in Europe and other global debt markets.
Comments from Federal Reserve Chair Janet Yellen also generated some selling pressure, as she said the returns on safe assets like bonds remains very low.
In remarks during a discussion with IMF Managing Director Christine Lagarde, Yellen predicted bond yields would see a sharp jump when the Fed begins raising interest rates.
Meanwhile, the weakness among treasuries came even though a report from payroll processor ADP showed that private sector employment increased by much less than expected in the month of April.
ADP said employment in the private sector increased by 169,000 jobs in April compared to economist estimates for an increase of about 200,000 jobs.
The weaker than expected data may point to some downside risk for the Labor Department’s monthly jobs report, which includes both private and public sector jobs.
The Labor Department report due on Friday is currently expected to show an increase of about 220,000 jobs in April compared to the increase of 126,000 jobs in March.
Despite the disappointing ADP data, Paul Ashworth, Chief U.S. Economist at Capital Economics, said most other labor market indicators suggest Friday’s report will show much healthier job growth.
While the Labor Department’s weekly jobless claims report may attract some attention on Thursday, trading activity may be somewhat subdued ahead of the release of the monthly jobs report on Friday.
The material has been provided by InstaForex Company – www.instaforex.com