Following the steep drop seen in the previous session, treasuries saw some further downside during trading on Wednesday.
Bond prices came under pressure in early trading but regained some ground as the day progressed to close only modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.4 basis points to 1.848 percent.
The ten-year yield added to the 9.4 basis point jump seen on Tuesday to reach its highest closing level in nearly a month.
The continued weakness among treasuries was partly due to the release of upbeat private sector employment data from payroll processor ADP.
ADP said private sector employment jumped by 214,000 jobs in February compared to economist estimates for an increase of about 185,000 jobs.
At the same time, the report showed a downward revision to the job growth in January, with the revised data showing an increase of 193,000 jobs compared to the previously reported addition of 205,000 jobs.
Mark Zandi, chief economist of Moody’s Analytics, said, “Despite the turmoil in the global financial markets, the American job machine remains in high gear.”
“Energy and manufacturing remain blemishes on the job market, but other sectors continue to add strongly to payrolls,” he added. “Full-employment is fast approaching.”
Later in the day, the Federal Reserve released its Beige Book, a collection of anecdotal reports from the twelve Fed districts.
The Fed said reports continued to indicate that economic activity expanded in most districts since the previous Beige Book.
The report also said labor market conditions continued to improve modestly, while most districts reported that consumer prices held steady.
Trading on Thursday may be impacted by reports on weekly jobless claims, factory orders, and service sector activity, although some traders may stay on the sidelines ahead of the closely watched monthly jobs report on Friday.
The material has been provided by InstaForex Company – www.instaforex.com