Treasury yields edge higher amid a weaker-than-expected jobs report


U.S. Treasury yields inch higher on early Wednesday’s trade as traders look past a private-sector employment report showing less job gains than forecast.

What are Treasurys doing?

The 10-year Treasury note yield
TMUBMUSD10Y,
0.683%
rose 0.8 basis point to 0.679%, while the 2-year note rate
TMUBMUSD02Y,
0.136%
was up 0.6 basis point to 0.139%. The 30-year bond yield
TMUBMUSD30Y,
1.435%
held its ground at 1.4265. Bond prices move inversely to yields.

What’s driving Treasurys?

Automatic Data Processing Inc. said 428,000 private-sector jobs were added in August, up from the previous 167,000, but falling short of the 1 million consensus forecast. The ADP report offered signs that further job gains were slowing down, amid concerns the recovery’s momentum was petering out.

Analysts, however, have noted the wide divergence between weak private-sector payrolls and a more robust official jobs numbers in the last three months. Investors are expected to shrug off the data and focus on the official employment report at the end of the week.

In other data, U.S. factory orders are due at 10 a.m. Eastern. Later, the Federal Reserve will release its latest Beige Book at 2 p.m., a collection of anecdotes from businesses across the country.

Richmond Fed President Tom Barkin added to the chorus of voices from the central bank defending the Fed’s decision to implement an average inflation targeting regime, but didn’t offer many details on how it was likely to be carried out.

What did market participants’ say?

“Initial estimates of private sector employment change have had glaring downside misses over the prior few months,” said John Herrmann, a rates strategist at MUFG Americas, in a note.



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