Ten-Year Yield Slumps To Two-Month Low On Weaker Than Expected Jobs Data

(RTTNews) - After showing a lack of direction early in the session, treasuries moved higher over the course of the trading day on Wednesday.

Bond prices bounced back and forth across the unchanged in early trading before climbing more firmly into positive territory.

Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.7 basis points to 4.289 percent.

With the decrease, the ten-year yield extended its losing streak to five sessions, falling to its lowest closing level in over two months.

The extended advance by treasuries came as a report from payroll processor ADP showing private sector job growth in the U.S. slowed by more than expected in the month of May added to optimism about the outlook for interest rates.

ADP said private sector employment climbed by 152,000 jobs in May after jumping by a downwardly revised 188,000 jobs in April.

Economists had expected private sector employment to increase by 173,000 jobs compared to the addition of 192,000 jobs originally reported for the previous month.

Meanwhile, bond traders largely shrugged off a separate report from the Institute for Supply Management showing service sector activity returned to growth in the month of May after contracting in April for the first time since December 2022

The ISM said its services PMI jumped to 53.8 in May from 49.4 in April, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 50.8.

With the much bigger than expected increase, the services PMI reached its highest level since hitting 54.1 in August 2023.

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims and the U.S. trade deficit, although traders are likely to be reluctant to make significant moves ahead of the release of the more closely watched monthly jobs report on Friday.