MW: Treasurys give up gains after ADP, auction announcement
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices gave up earlier gains on Wednesday after ADP said U.S. private-sector employment had increased by 42,000 in July.
Also, the government said it will sell $74 billion in debt next week in its quarterly refunding. Action may be limited before ISM's index on the health of the non-manufacturing sector.
Yields on 10-year notes (UST10Y 2.92, +0.01, +0.38%) , which move inversely to prices, rose 1 basis point to 2.92%. A basis point equals 0.01%. The yields slipped as low as 2.88% before U.S. trading hours.
Yields on 2-year notes (UST2YR 0.55, +0.02, +2.98%) were little changed at 0.55%, near an all-time low.
The ADP report, which showed more hiring than some analysts anticipated, comes two days before the Labor Department's monthly report on overall employment for the month. See more on ADP jobs data.
Economists polled by MarketWatch are looking for a decline of 60,000. That payrolls estimate includes an expected increase of 96,000 jobs in the private sector and a loss of about 145,000 temporary Census jobs.
The Treasury Department will auction $34 billion in 3-year notes (UST3YR 0.82, +0.04, +4.73%) , on Tuesday, a $1 billion decrease from last month, as expected by many analysts as the government has reduced how much debt it needs to sell as the outlook tax receipts has become clearer. Read more about bond auctions.
On Wednesday, the government will sell $24 billion in 10-year notes, followed by $16 billion in 30-year bonds (UST30Y 4.04, -0.01, -0.17%) the next day. The sizes of the 10-year and 30-year bond auctions are the same as during the previous refunding in May. Some analysts, including those at Nomura Securities, one of the 18 primary dealers required to bid at auctions, expected the 10-year sale to be shrunk as well.
Auctions of longer-dated securities have not decreased as much as the government has said it intends to lengthen the average maturity of its debt to take advantage of historically-low interest rates and reduce the risks related to refinancing debt in the next few years.
