Treasuries Regain Ground Following Recent Sell-Off

Following the sell-off seen over the two previous sessions, treasuries regained some ground during trading on Wednesday.

Bond prices fluctuated over the course of the session but largely maintained a positive bias. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.7 basis points to 4.735 percent.

The decrease came after the ten-year yield spiked by 22.9 basis points over the two previous sessions reaching its highest levels in over sixteen years.

The rebound by treasuries partly reflected a positive reaction to a report from payroll processor ADP showing private sector job growth slowed by much more than expected in the month of September.

ADP said private sector employment rose by 89,000 jobs in September after climbing by an upwardly revised 180,000 jobs in August.

Economists had expected private sector employment to advance by 153,000 jobs compared to the addition of 177,000 jobs originally reported for the previous month.

The increase in September reflected the slowest pace of job growth since January 2021, when private employers shed jobs.

The data helped ease concerns about the outlook for interest rates, although traders seemed reluctant to make more significant bets ahead of the release of the Labor Department’s more closely watched jobs report on Friday.

Economists expect employment to increase by 170,000 jobs in September after climbing by 187,000 jobs in August, while the unemployment rate is expected to edge down to 3.7 percent from 3.8 percent.

Treasuries gave back ground following the release of a separate report from the Institute for Supply Management showing continued service sector growth but managed to move back to the upside.

A report on weekly jobless claims may attract some attention on Thursday, although activity may remain subdued ahead of the monthly jobs report on Friday.

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