BLBG: Treasuries Fall as Private Report Shows U.S. Added More Jobs Than Forecast
Treasuries remained lower after an industry report showed the U.S. more jobs than forecast in November, signaling a labor market recovery is under way.
The 10-year note fell for the first day in four amid speculation the European Central Bank may take additional steps to prevent the euro region’s debt crisis from spreading diminished the appeal of U.S. securities as a haven before reports that economists said will show U.S. manufacturing expanded for a 16th month.
“The labor data adds to the optimism as we saw a very strong ADP report, which weighs on yields some as it indicates improved prospects for Friday’s nonfarm payrolls number,” said Guy LeBas, chief fixed-income strategist and economist at Janney Montgomery Scott LLC in Philadelphia. “The Treasury selloff is being dominated by Europe.”
The declines pushed the yield on the 10-year note higher after reaching its lowest level in a week yesterday. The Federal Reserve is scheduled to buy $7 billion to $9 billion of notes maturing from June 2016 to November 2017 today as part of its plan to spur growth.
The benchmark 10-year yield rose 11 basis points to 2.91 percent at 8:16 a.m. in New York, according to BC Cantor Market Data. The yield fell to 2.75 percent yesterday, the lowest level since Nov. 23. The 2.625 percent security due in November 2020 fell 29/32, or $9.06 per $1,000 face amount, to 97 19/32.
The 30-year bond yield climbed seven basis points to 4.18 percent. It fell to 4.05 percent yesterday, the lowest level since Nov. 5.
Companies in the U.S. added 93,000 workers to payrolls in November, according to figures from ADP Employer Services.
The ADP number was forecast to show a gain of 70,000 jobs, according to the median estimate of 40 economists surveyed by Bloomberg News. Projections ranged from gains of 40,000 to 125,000.
To contact the reporters on this story: Keith Jenkins in London at kjenkins3@bloomberg.net Cordell Eddings in New York at ceddings@bloomberg.net;
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net.
