After moving notably higher over the course of the previous session, treasuries gave back some ground during trading on Wednesday.
Bond prices moved to the downside in early trading and remained stuck in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.3 basis points to 2.178 percent.
With the modest increase on the day, the ten-year yield bounced off the one-month closing low set in the previous session.
The pullback by treasuries was partly due to profit taking following a recent upward trend, with upbeat jobs data also weighing on bonds.
Payroll processor ADP released a report this morning showing that employment in the private sector increased by more than expected in November.
ADP said private sector employment jumped by 217,000 jobs in November after climbing by an upwardly revised 196,000 jobs in October. Economists had expected an increase of about 190,000 jobs.
A separate report from the Labor Department showed that labor productivity increased by more than initially estimated in the third quarter.
Treasuries remained stuck in the red as Federal Reserve Chair Janet Yellen delivered remarks that seemed to signify the central bank remains on track to raise interest rates later this month.
In a speech to the Economic Club of Washington, Yellen stopped short of explicitly saying the Fed will hike rates but acknowledged the conditions for tightening are on the verge of being met.
“I currently judge that U.S. economic growth is likely to be sufficient over the next year or two to result in further improvement in the labor market,” Yellen said.
She added, “Ongoing gains in the labor market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2% as the disinflationary effects of declines in energy and import prices wane.”
Yellen downplayed concerns about the global economy that may have kept the Fed from raising rates earlier this year.
The Federal Reserve also released its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.
The Beige Book said the districts indicated that economic activity increased at a modest pace in most regions of the country since the previous report.
Trading on Thursday may be impacted by reports on weekly jobless claims, service sector activity, and factory orders as well as Yellen’s testimony before the Congressional Joint Economic Committee.
The Treasury Department is also due to announce the details of next week’s auctions of three-year and ten-year notes and thirty-year bonds.
The material has been provided by InstaForex Company – www.instaforex.com