By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices turned down on Wednesday, pushing yields higher, after a report from ADP said private employment jumped 297,000 in the U.S last month, almost triple what economists had expected.
Yields on 10-year notes (UST10Y 3.40, +0.06, +1.80%) , which move inversely to prices, rose 7 basis points to 3.40%, after falling to 3.30% before the report.
A basis point is one-hundredth of a percentage point.
Yields on 2-year debt (UST2YR 0.67, +0.04, +7.09%) rose 5 basis points to 0.67%.
Thirty-year bond yields (UST30Y 4.47, +0.04, +0.97%) added 4 basis points to 4.46%.
ADP’s report on private companies comes two days before the government’s more closely-followed nonfarm payrolls report for the month. Read more on ADP.
Economists polled by MarketWatch predict the Labor Department report, which includes government workers, to show a job gain of 143,000 in December, and for the unemployment rate to remain at 9.8%.
The ADP report “is unquestionably a positive for the economy, the labor market, income growth and risk assets,” said Dan Greenhaus, chief economic strategist at Miller Tabak. “At the same time, it should be pointed out that December always has seasonal quirks for a host of estimates.”
Still to come is ISM’s report on the services sector and the Federal Reserve’s buyback of 2028-2040 bonds.
The buyback is part of the Fed’s so-called quantitative easing program to support the economy, but also includes reinvestment of maturing mortgage-related holdings. The central bank previously said it expected to buy $1.5 billion to $2.5 billion during this operation.
On Tuesday, Treasurys came under pressure, mostly from a host of corporate bond sales which triggered heavy hedging activity, analysts said.
General Electric Co. (GE 18.54, -0.07, -0.38%) division GE Capital sold $6 billion, according to Informa Global Markets. MetLife Inc. (MET 45.83, -0.28, -0.61%) sold another $1.5 billion.
European banks also issued billion in debt, including $2 billion from Royal Bank of Scotland (RBS 12.50, -0.25, -1.96%) , according to Informa. See story on European bank bonds.
